‘Unrelenting’ Financing Conditions Squeeze New-Vehicle Buyers
The third quarter of 2024 saw rising challenges for new-vehicle buyers as auto financing conditions tightened. Extended 84-month loan terms have become more common, reflecting consumers’ struggles with high vehicle prices, according to the latest report from Edmunds.
Experts warn that this trend indicates many buyers are purchasing cars beyond their financial means. Combined with limited trade-in equity, these conditions pose significant risks to affordability and could affect future market dynamics. Analysts emphasized the need for sustainable lending practices to support both consumers and the industry.
“Longer loan terms might make monthly payments more palatable for consumers, but the harsh reality is that most Americans don’t want to keep their vehicle for seven years,” said Edmunds Director of Insights Ivan Drury. “Simply put, longer loan terms put car owners at greater risk of rolling negative equity into their next auto loan.”
