ATLANTA — If your credit union is seeing an increase in the length of loan terms in its portfolio for new cars, you're not alone.
Data from the Federal Reserve show loan maturity dates for new vehicles is up from 48.6 months in 2001 to 61.0 months for 2006. In fact, new vehicle loan terms have been for 60 months or longer since 2003.
This trend is supported by findings of a study recently conducted by BenchMark Consulting International that show 89% of new car buyers are financing their vehicles for more than four years, and 55% select loans with terms of more than five years.
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With used cars, 82% of buyers finance for more than four years, and 40% finance for more than five years.
The study also found that even though the price of cars has increased by more than 500% in the last 35 years, buyers have managed to keep their monthly car payments in check–car payments, adjusted for inflation, have only gone up about 20%.
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