35 percent of new car loans now exceed six years.
The average new car loan spans 69 months.
New vehicle loan amounts rose by $2,150 from the prior year.

Vehicles continue to climb in price each year, much like other essentials such as fuel, groceries, and housing. Yet cars remain essential for most households. While financing helps make dependable models available to more buyers, recent figures indicate that a growing share of consumers are extending their repayment periods to manage monthly costs.

Experian Automotive data reveals that close to one-third of purchasers are selecting terms beyond six years. More than 35 percent of new-car financing now stretches past that mark, up from 31 percent the previous year.

The used-car segment shows a parallel shift, with 32 percent of loans exceeding six years compared with 29 percent twelve months earlier. Average amounts borrowed for new vehicles climbed $2,150 year-over-year to reach $43,925.

New Car Loans Over 6 Years - 35 percent (+4 percent)
Used Car Loans Over 6 Years - 32 percent (+3 percent)
Average New Car Loan Amount - $43,925 (+$2,150)

One encouraging development is the drop in interest rates. Average refinance rates fell to 8 percent from 10 percent, trimming monthly payments by roughly $81 on average.

Buyers are also shifting toward credit-union refinancing, with 1 percent moving from banks to credit unions. These institutions typically offer lower rates and more favorable terms than traditional banks.

Melinda Zabritski, Experian head of automotive financial insights, commented:

'Affordability continues to shape financing decisions across the automotive market. While shoppers continue to lean toward larger, more expensive vehicles, we are seeing more consumers take advantage of longer-term loans to offset rising monthly costs.'
'While consumers are benefiting from improved refinancing conditions, we are also seeing broader financing accessibility emerge. There continues to be increased momentum within the subprime segment as financing options expand across the automotive finance market.'

With average loan lengths now at 69 months for new cars and 67 months for used cars, the numbers confirm that buyers are stretching terms, even on higher-risk used vehicles, simply to keep a car in the driveway.

Motor1 Analysis: A robust used-car market has added pressure for value-seeking shoppers. As new-car prices keep rising, financial strain shows no sign of easing.