Recent Reports Show Car Buyers are Opting for Car Loans with Longer Duration
New surveys show that people buying new as well as old ones are opting for loans that stretch for a longer duration.
In the first quarter of the year, in an average the extent of loan duration chosen by people for new cars was sixty seven months. For old cars the average length of loan that people opted for was sixty two months. Experian Automotive, which came up with the data said these lengths for auto loans are the "new all-time highs."
Buyers of new cars in an average during the initial quarter financed $28,711, which is an increase from the $27,612 noted one year earlier. Their monthly payments in an average were $488, and that amount too is on the upward scale compared to the $474 one year back.
However, choosing longer duration for loans could cost the buyers more in the long run.
Experian Automotive's data released on Monday revealed that Auto loans which stretch from 73 to 84 months spiked 29.5% for new vehicles in the first quarter, which is a record high. When compared to last year's 25% it is a big leap but when compared to five years back, the increase is just 9%.
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