More than a third of new car buyers in America are now financing their vehicles for longer than six years. That number, pulled from Experian Automotive’s early 2026 data, jumped four percentage points in a single year — from 31 percent to 35 percent. The used market followed the same trajectory, climbing from 29 percent to 32 percent.
The average new car loan now sits at $43,925, up $2,150 from a year ago. The average term? Sixty-nine months for new, 67 for used. Americans aren’t buying less car. They’re just spreading the pain thinner.
This is what happens when vehicle prices ratchet upward year after year while household budgets absorb simultaneous hits from fuel, food, insurance, and rent. The car doesn’t become optional. The math just gets uglier.
Melinda Zabritski, Experian’s head of automotive financial insights, framed it diplomatically: “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.”
“Take advantage of” is doing a lot of heavy lifting in that sentence. A 72-month or 84-month loan on a depreciating asset isn’t an advantage. It’s a trap with a monthly payment that looks manageable.
There is one genuinely positive thread in the data. Average refinance rates dropped from 10 percent to 8 percent year-over-year, trimming about $81 off monthly payments. Credit unions are driving that shift, picking up an additional one percent of market share from traditional banks. Credit union rates have always been friendlier, and more buyers are finally figuring that out.
But a lower rate on a longer loan doesn’t eliminate the core problem. It masks it. A buyer who stretches to 84 months on a $44,000 vehicle will almost certainly be underwater for a significant chunk of that loan’s life.
When something goes wrong — a job loss, a fender bender, a transmission failure outside warranty — there’s no equity cushion. There’s a bill.
The subprime segment is expanding too. Zabritski noted “increased momentum” as financing options reach deeper into the credit spectrum. More people qualifying for loans sounds democratic until you remember that subprime auto lending was a flashing warning light a decade ago, and the conditions feeding it haven’t improved.
Meanwhile, consumers keep gravitating toward bigger, pricier trucks and SUVs. Average monthly new car payments now exceed $800. The industry has spent years pushing transaction prices higher through trim-level inflation, tech packages, and the slow extinction of affordable compact cars. Buyers responded the only way they could — by borrowing more for longer.
The used market offers no relief valve. Strong residual values have kept secondhand prices elevated, so the traditional escape hatch of buying a two- or three-year-old car at a steep discount barely exists anymore. Used car buyers are now taking on loan terms that would have seemed absurd for new vehicles a generation ago.
None of this is sustainable in a straight line. Loan terms have a ceiling — lenders won’t write 10-year car notes, at least not yet — and vehicle prices show no sign of retreating.
Something eventually gives. Either manufacturers find a way to sell cheaper vehicles at a profit, or a growing slice of the American public simply gets priced out of the new car market entirely.
The 69-month average loan term isn’t just a data point. It’s a thermometer reading on an economy where the car you need costs more than the car you can afford, and the distance between those two numbers keeps growing.
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