Rising New-car Prices and Lender Competition to Entice Borrowers Leads to Longer Auto Loan

A new report indicates that the purchase of new cars is being facilitated by significantly increased auto loan terms and capped repayments to under $500 a month, says consumer finance site PersonalLoansForBadCredit.org.

A new report by the Wall Street Journal details that competition within the car loans industry is driving lenders to lower monthly repayments and increase auto loan terms in a bid to keep up with consumer’s high demand for cars but waning means to pay for them.

The report demonstrates that the average price of a new car in the U.S. now stands at $31,000. This represents an increase of $3,000 in the last 4 years. However, the average monthly car payment has reduced by $5 from $460 to $465. This is being attributed to longer loan terms and lower rates of interest.

In the last 4 months of 2012, Experian Information Solutions Inc. report that the average term of a new car loan was 65 months, making this the longest ever average length for an auto loan in the U.S. Additionally, 17% of all new auto loans in that period fell between 73 – 84 months in length, with a significant proportion being 97 months. This is an increase of 6% from four years ago, when only 11% of car loans were in that category.

PersonalLoansForBadCredit.org, the free online car loans aggregator and comparison service, is partnered with a number of competitively minded car loan companies that offer a wide selection of deals and offer instant decisions on-screen. The site encourages consumers to be aware of the heightened risk within such long car loan terms in the following statement.

“If a consumer opts for a 7 – 6 year car loan, it will take longer to get to the stage where they owe less money on the car than it is worth. This negative equity makes it harder to sell or trade the vehicle if the payments become unmanageable. By comparing a wider range of options and doing the math up front with the help of our car loan introduction service, the risk can be managed.”


Consumers can complete an easy application form within two minutes to be instantly considered by top auto loan companies. Approved consumers can receive the funds within 24 hours directly into bank checking accounts. More can be found at their website.

Release ID: 11775