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Average new-car loan hits 67 months

June 5, 2015
The average loan term for a new vehicle rose to 67 months during 2015’s first quarter and to 62 months for used, both records. And more than one-fourth of all new light-vehicle loans had terms of 73 to 84 months.
 
Loans of six to seven years, the longest term tracked by Experian, were the fastest growing segment of the market, climbed 19 percent from a year earlier and now represent 29.5 percent of all new-vehicle financing. That was the highest share since Experian started tracking loans in 2006.
New-vehicle loans of 61 to 72 months held the largest share of the market in the first quarter, 39.7 percent, but that was down 3 percent from a year earlier.
 
'Nothing wrong’
 
With vehicles lasting on average more than 12 years, "there’s nothing wrong with a six- or seven-year loan," said Steven Szakaly, chief economist for the National Automobile Dealers Association. Consumers have typically borrowed for half of their vehicles’ lifetime, he said.
"This is the outcome of increased durability and quality of vehicles," Szakaly said. "Cars last longer. They have many more features in terms of safety and emissions compliance. That’s not a bad thing."
 
 

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