The Rise of 84-Month Car Loans Among Buyers

In recent months, there has been a noticeable increase in the number of American car buyers opting for 84-month loans for new vehicles. According to research conducted by the analytics firm Edmunds, the share of such deals rose by almost 40% compared to last year. This trend has emerged as a result of rising prices for new cars and increasing interest rates, which have led buyers to stretch their financing terms.

The average cost of a new vehicle in the US has reached a record of $48,000, significantly exceeding levels seen just a few years ago. For many buyers, the high price becomes a barrier to the immediate payment of a new car's price, and in response, they begin to look for longer financing options to help ease their monthly payments.

According to Edmunds, the average loan amount for a new car currently stands at around $38,000. With this price for a vehicle, buyers find it increasingly difficult to fit into traditional 60-month terms, resulting in a growing share of those willing to sign agreements for 72 or 84 months.

This trend raises concerns among experts who warn of potential financial risks. Longer loans can lead to vehicles depreciating in value more quickly than buyers can pay off their debts. This means that if a car owner needs to sell, they may find themselves in a situation where their debt exceeds the market value of the vehicle.

Furthermore, longer loans can come with higher interest rates, which ultimately increases the total cost of the vehicle for the buyer. Despite this, for many Americans, lower monthly payments have become a priority in light of rising automotive prices and financial unpredictability.

In this situation, buyers should pay close attention to loan terms and try to anticipate market changes to avoid future financial difficulties. Experts recommend considering shorter-term options whenever possible and increasing the down payment to help reduce overall debt.

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