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Behold the Rise of the 84-Month Auto Loan
If you thought 84-month auto loans were only for people with bad credit or poor income, think again. This longer loan term is becoming increasingly mainstream, and it’s fueled by more people wanting luxurious trucks and SUVs.
Bloomberg has an absolutely fascinating piece on this trend, along with other scary things happening with vehicle loans in the United States. For example, Americans owe $1.1 trillion on vehicles, an all-time high. Now, 72-month loans make up 20 percent of all auto loans.
What is all this debt resulting in? More people are behind, with 6.3 million people who are 90 days or further behind on their payments.
Back to the trucks and SUVs, they make up over two thirds of current vehicle sales in the country. That’s pushed the average new vehicle price to over $35,000. Right now, automakers are celebrating, because their profits aren’t taking a hit. But, with prices nudging higher, loans extending out further, and more people getting behind on payments, it doesn’t take a genius to see what’s coming.
Oh, and I forgot to mention interest rates are climbing. It’s no unforeseeable that the United States vehicle market could be driven by lots of pre-owned sales at dealerships, because new cars have become obnoxiously overpriced. Clunkers have risen dramatically in value, like everyone can feel the coming bubble pop.
Steven has been writing about cars and other transportation issues worldwide for over ten years. His love for cars started long before he can remember, with Corvettes and 911s being his first car-crushes. Since then, he has owned many types of vehicles and has come to appreciate a wide variety of models, the diverse car culture groups, and the automotive industry in general.
