How Times Have Changed

Only a small number of buyers can remember the old days when the normal for car loans was 24 months. Back then a large percentage of buyers only wanted 12 months or 18 months. And under no circumstances did buyers consider trading a car before the final payment was made.

Now, with rare exceptions, its unheard of for a new-vehicle buyer to finance for only 24 months. The normal is now 6 and 7 years.

Here are the percentages of new-vehicle loan originations by the term as reported by the Experian Q2 2018 State of the Automotive Finance Market report:

Term (months) Percent
49-60 19.4%
61-72 40.2%
73-84 32.0%
85-96 1.2%