Many auto consumers are stretching their finances to the breaking point to afford what in most parts of the U.S. is a necessity. Studies by JD Power and TransUnion point up the lengths many are stretching to buy cars.

Loan terms of 72 months are now “commonplace,” and even 84-month loans have entered the mainstream, JD Power reports.

Meanwhile, debt-to-income ratios have risen to new highs, especially among nonprime segments, according to TransUnion.

The consumer credit reporting agency says that from 2019 to 2025, nonmortgage DTI, which includes automotive loans, rose an average of 143 basis points among subprime consumers, and nonprime consumers already had much higher DTI levels than their prime counterparts.

Over about the same period, extra-long auto loan terms increased significantly, 84-month loans climbing from 7% of auto sales in March 2019 to about 13% this March and 72-month loans moving from 36% to about 41%, JD Power reported.

“In a climate of rising transaction prices, consumers continue to focus primarily on the monthly payment,” the company's report says.

“Extending the loan term reduces the payment to a manageable level without reducing the price of the vehicle. However, new-vehicle prices have risen so dramatically that, even with a large portion of buyers now opting for longer-term loans, the average monthly payment is still climbing.”

JD Power put March’s average new-vehicle monthly payment at $806, up 5% year-over-year.

Longer loans create a cycle of consumers “shopping” for better terms, many returning to the dealer after just three to four years, JD Power says. In fact, 45% of 84-month loan holders are doing so. One of the results of the practice, though, is negative equity on trade-ins, which was the case 26% of the time last year.

The two companies’ metrics illustrate the growing disparity between well-to-do and mass-market consumers.

“Super prime consumers generally remain well positioned to manage affordability challenges,” said TransUnion Head of U.S. Research and Consulting Michele Raneri, “while those in non‑prime risk tiers face growing stress as required payments consume an increasing share of their income.”  

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