"In Q1, the share of 84-month loans hit 20%-a record at the time. But now, less than six months later, 84-month loans account for a whopping 21.6% of all new car notes, just behind the 60-month loans that account for 36.1% of buyers who finance. Despite the risk of owing more than the car's worth, some lenders are pushing even longer terms."
"[Mike Schwartz, Vice President of dealer operations at Los-Angeles-based Galpin Motors], who used to work for Ford Motor Co.'s lending arm, said he's amazed to see the return of 8-year loans, which first appeared shortly before lax lending practices triggered the Great Recession of 2009. Such 96-month loans account for less than 1% of auto loans, but they are on the rise."
Extended auto-loan terms are growing rapidly, with 84-month loans reaching 21.6% of new-car notes while 60-month loans remain at 36.1% of financed buyers. Lenders and dealers are offering yet longer terms, including a return of eight-year (96-month) loans that remain under 1% but are increasing. The shift toward longer financing reflects surging new-vehicle prices and buyers stretching payments to afford purchases. Longer terms increase the risk of owing more than a vehicle's value and echo lending patterns that appeared before the 2009 financial crisis, prompting industry concern.
Read at InsideEVs
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