Car buyers in the United States are getting stuck in lengthy car loans unlike ever before, CNN reports.
The publication reports that last month, the average car loan extended out to 69.3 months, the highest since Edmunds started tracking car loans in 2002 and likely the longest it has ever been.
According to analyst Jessica Caldwell, these increasingly lengthy loans show consumer confidence in the economy and their ability to pay their way out of debt. In June, car buyers borrowed an average of $31,000 with average monthly payments of $517.
It is reported that a key reason why loans are increasing is because more consumers are interested in SUVs and trucks, vehicles that are often more expensive than smaller cars and frequently come loaded with the latest and greatest technology features.
Edmunds reports that while an increasing number of car buyers think they can pay off their loans, many are unable to. In fact, approximately a third of vehicles traded in at dealerships are still being paid off, meaning a customer’s debt often increases as part of a new car loan. Alongside this, the average down payment in June hit $2,453, a significant 7 per cent increase over June 2016.
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