Even TFA points out that this is nothing new, as I was thinking "we bought a new car 20 years ago, and 84 month loans were an option". It was an option that few took, but it was there. Now, apparently, 21% of new car loans are 84 months.
While we're on the subject, here's one for you: if you buy an RV, you can get a 20 year loan. We technically have one at the moment (it'll be paid off after having held the loan for a few months). You think cars depreciate fast? Go buy an RV. I can't imagine carrying a 20 year loan on something that will be nearly impossible to sell before the loan is paid off.
Hard to understand why people are downvoting the parent. That may be a right wing dogwhistle, but also the entire corporate industry seems to be trying real hard to turn life on planet earth into a subscription.
The real news is Harley Davidson motorcycles are so expensive people are getting 8 year loans at over 10% APR - and that's with good credit! Prices today are insane!
Cars last longer now, so this may not be as bad as it sounds. The real issue is whether people are ending up underwater on their vehicles - that is, are loan lengths increasing faster than depreciation curves are flattening.
Motorcycles are a great option for those who live in suitable climate and don't have to text and play Candy Crush while they're driving. You can complement with a cheap car for when you need four wheels, instead of going into years of debt for a decent vehicle.
In 2020 I bought a "disposable" Renault Kangoo to schlepp things around and go on road trips. It broke beyond repair last week and I started looking for a replacement.
Even a 3 year old Dacia Dokker - basically the same exact car with newer trim - is pushing €15k. A new Kangoo is around €30k. That's a lot for an economy car that does nothing significantly better than the 2007 version.
Since I only drive 1-3 times per month, I decided to stop owning a car. The cost of ownership is just way too high.
My experience is that the base price for a car hasn't increased as much as all the mandatory dealer add-ons they force on you. I'm currently trying to buy a new car and the dealer refuses to sell me one without a Pulse brake light, paint protection, ceramic glaze, wheel & tire protection, floor mats, and prepaid maintenance, and I must trade in my current vehicle. Other dealers in the area all do the same thing. I walked out the door and they never called me back so I suppose this strategy works for them. Dealers have gone from adding zero value to adding negative value, and thanks to their lobbying it is impossible to buy a car without them.
Given the current state of many car companies (Nissan, Stellantis, Mitsubishi) a 7-year loan may be a bit over-optimistic about the future of the car and the manufacturer
One important reason is that the US is imposing significant tariffs (25%) on Chinese-made automobiles. You can buy a very nice car just south of the border in Mexico starting at MXN$300,000 ($20,000 USD).
A lot of people have too much car for their needs. Big Child Car Seat is definitely driving some of the growth of vehicles, as is quite reasonably priced gas, but I feel most people could go smaller/used and afford what they actually NEED vs WANT.
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[ 4.6 ms ] story [ 41.4 ms ] threadWhile we're on the subject, here's one for you: if you buy an RV, you can get a 20 year loan. We technically have one at the moment (it'll be paid off after having held the loan for a few months). You think cars depreciate fast? Go buy an RV. I can't imagine carrying a 20 year loan on something that will be nearly impossible to sell before the loan is paid off.
Even a 3 year old Dacia Dokker - basically the same exact car with newer trim - is pushing €15k. A new Kangoo is around €30k. That's a lot for an economy car that does nothing significantly better than the 2007 version.
Since I only drive 1-3 times per month, I decided to stop owning a car. The cost of ownership is just way too high.