As vehicles become more expensive, consumers are showing a willingness to extend loan terms, which have reached an all-time high, according to a report from Edmunds.
Average new-vehicle loan terms reached a high of 69.3 months in June, up 6.8% from five years ago, according to the report. Likewise, the average used-vehicle loan length reached 66.9 months, up 6% from five years ago.
This is inline with a rising cost in vehicles, the report notes. The average amount buyers financed hit $30,945 in June, up $631 since May. That has led to the highest monthly payments on the the year for new vehicles averaging $517, up from $510 in May. Average new-vehicle monthly payments are 2.1% higher compared with the year prior and 11.3% higher than the monthly payment from five years ago.
Meanwhile, used-vehicle monthly payments rose to $383 — a 0.8% increase compared with the year prior and 3.5% higher than five years ago.
Average new-vehicle APR was 4.96% in June, 5.7% lower compared with a year ago and 13.6% less from five years ago. However, down payment has increased. The down payment in June was $3,687, which has increased 6.6% since 2016 and 11.7% over five years.
Among used vehicles, APR was 7.64% in June, dropping 2.7% from a year ago. Still, APR remains 5.4% higher than it was five years ago. Like new-vehicle loans, down payment of used-vehicle loans has increased, too. Average down payment was $2,453 in June, up 7.1% from a year ago and 11% higher over a five-year span.
