Your Money Minute 8 Year Car Loans Oh My 12/31/25
Dec 31, 2025
Car buying trends are changing dramatically. Many potential buyers are now avoiding dealerships due to skyrocketing prices. To attract sales, dealers are stretching out loan terms, with seven- and even eight-year options becoming the norm. This shift allows for lower monthly payments, which are a primary concern for buyers, averaging around $750 for new vehicles. The focus on affordability is reshaping how consumers approach auto financing.
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Headlines Show Buyers Hesitate
- News headlines reported shoppers staying away from lots as prices rose, illustrating buyer hesitation.
- CNBC's Carl Quintanilla and Phil LeBeau highlighted how rising prices push buyers to wait or seek lower payments.
Longer Loans Lower Monthly Payments
- Car dealers lower monthly payments by lengthening loan terms to attract buyers.
- Stretching loans to seven or eight years reduces payments but extends debt duration.
Buyers Shop By Monthly Payment
- Consumers focus primarily on the monthly payment when buying vehicles rather than the total price.
- That payment-focused behavior drives demand for longer loan terms like seven-year loans.