A Record Number Of Americans Are Taking Out 6-Year Car Loans
According to early 2026 data, nearly a third of buyers are relying on longer loan terms to afford new and used cars.
THE BREAKDOWN
- 35% of new car loans are longer than six years.
- The average new car loan length is 69 months.
- New vehicle loan amounts increased by $2,150 compared to last year.
Cars are getting more expensive every year, along with everything else—gas, food, rent, etc. But that doesn’t make cars any less critical to the average American. Car loans make nicer, more reliable cars accessible to more people, but according to the latest data, more folks than ever are stretching their loan terms to afford them.
Experian Automotive reports that nearly a third of buyers are taking out loans longer than 6 years to try to reduce monthly payments. Over 35 percent of new cars are financed longer than six years, compared to just 31 percent a year ago.
A similar trend emerged in the used market, with 32 percent of used cars on loans longer than six years, compared to 29 percent a year ago. The average loan amount for new vehicles increased by $2,150 year-over-year, reaching $43,925, which is a significant increase.
- New Car Loans Over 6 Years — 35% (+4%)
- Use Car Loans Over 6 Years — 32% (+3%)
- Average New Car Loan Amount — $43,925 (+$2,150)
There is a positive angle to this trend, however. Loan rates have decreased significantly since last year, with the average refinance rate dropping to 8 percent from 10 percent, bringing monthly payments down by $81 on average.
There’s also a trend toward credit union refinancing, with 1 percent of buyers swapping to a credit union rather than a bank—this is the likely driver of the lower interest rates. Credit union financing is often much less expensive than bank financing, with more favorable interest rates.
Here's what Melinda Zabritski, Experian’s head of automotive financial insights, has to say:
'Affordability continues to shape financing decisions across the automotive market. While shoppers continue to lean toward larger, more expensive vehicles, we’re seeing more consumers take advantage of longer-term loans to offset rising monthly costs.'
'While consumers are benefiting from improved refinancing conditions, we’re 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 the average loan term at about 69 months for new cars and 67 months for used cars, the data doesn’t lie: people are borrowing longer, even on riskier used cars, just to afford having one.
Motor1’s Take: The strong used car market has only made things more difficult for deal-conscious buyers. With new car prices only going up, financial pressure is only increasing.
More Car Buying News
Source: Experian Automotive
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