Though U.S. auto sales have slowed a bit in recent months, the American market seems all but certain to set a new record again this year, the third consecutive all-time high.
So why does that worry many industry experts? Because a growing number of car buyers are stretching their budgets with some of the longest loan terms ever offered, something one senior industry executive calls “a formula for disaster.”
A new study by TransUnion shows that the average auto loan is now on the books for 67 months, up from just 62 months at the beginning of the decade. And the report reveals that the number of loans running anywhere from 73 to 84 months has more than doubled since 2010.