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Car Loans Now Last Longer Than Presidential Terms
Why 6-Year Auto Loans Are America's New Normal
Remember the time when a four-year car loan felt like forever? In 2025, however, the average car loan term now stretches to nearly six full years of monthly payments. That's longer than a presidential term and just shy of outlasting two midterm elections. This dramatic shift represents a seismic change from car loans that averaged around 60 months less than a decade ago.
The six-year car loan has become the sweet spot for most buyers, offering a balance between affordable monthly payments and reasonable interest costs. What's driving this trend? Simple economics. The average cost of a new car is just below $50,000, forcing consumers to stretch their auto loan terms just to keep payments affordable. With average monthly payments hitting $745 for new vehicles in 2025, buyers are desperately seeking ways to reduce their monthly financial burden.
Photo by Brandon Bell/Getty Images
The Rise of Super-Long Car Loans
While six-year loans now dominate the market, seven and eight-year car loan terms are quietly gaining popularity. These super-long auto loan terms can significantly reduce monthly obligations: a $35,000 car loan at 7% interest drops from approximately $693 monthly on a five-year term to just $510 monthly when stretched to seven years.
However, this payment relief comes with a steep price tag. A $35,000, six-year loan at eight percent costs more than $44,000 total, and extending to seven or eight years only amplifies this interest burden.
Caught In The Low Monthly Payment Trap
The mathematics of extended car financing reveals a sobering truth. While longer loan terms reduce monthly payments to manageable chunks, they dramatically increase total costs. The average loan amount for a new car in 2025 is $41,473, with an average interest rate of 7.1%.
Stretching a $40,000 car loan from five years to seven years might reduce monthly payments by $150, but it adds thousands in total interest costs. This cheaper monthly payment-focused approach often leaves buyers underwater on their loans for years, making leasing a smarter choice. The effects of tariffs on new car prices will just compound matters.
Here’s a handy reality check: before you sign on the dotted line, stop to consider whether the President who was in office when you bought your car will still be around when you finally finish paying for it.
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Why 6-Year Auto Loans Are America's New Normal
Remember the time when a four-year car loan felt like forever? In 2025, however, the average car loan term now stretches to nearly six full years of monthly payments. That's longer than a presidential term and just shy of outlasting two midterm elections. This dramatic shift represents a seismic change from car loans that averaged around 60 months less than a decade ago.
The six-year car loan has become the sweet spot for most buyers, offering a balance between affordable monthly payments and reasonable interest costs. What's driving this trend? Simple economics. The average cost of a new car is just below $50,000, forcing consumers to stretch their auto loan terms just to keep payments affordable. With average monthly payments hitting $745 for new vehicles in 2025, buyers are desperately seeking ways to reduce their monthly financial burden.
Photo by Brandon Bell/Getty Images
The Rise of Super-Long Car Loans
While six-year loans now dominate the market, seven and eight-year car loan terms are quietly gaining popularity. These super-long auto loan terms can significantly reduce monthly obligations: a $35,000 car loan at 7% interest drops from approximately $693 monthly on a five-year term to just $510 monthly when stretched to seven years.
However, this payment relief comes with a steep price tag. A $35,000, six-year loan at eight percent costs more than $44,000 total, and extending to seven or eight years only amplifies this interest burden.
Caught In The Low Monthly Payment Trap
The mathematics of extended car financing reveals a sobering truth. While longer loan terms reduce monthly payments to manageable chunks, they dramatically increase total costs. The average loan amount for a new car in 2025 is $41,473, with an average interest rate of 7.1%.
Stretching a $40,000 car loan from five years to seven years might reduce monthly payments by $150, but it adds thousands in total interest costs. This cheaper monthly payment-focused approach often leaves buyers underwater on their loans for years, making leasing a smarter choice. The effects of tariffs on new car prices will just compound matters.
Here’s a handy reality check: before you sign on the dotted line, stop to consider whether the President who was in office when you bought your car will still be around when you finally finish paying for it.