Car Loans Get Longer, Rental Vehicles Get Older

While nobody needs to tell you that the economy isn’t in good health, we should at least hip you to the latest automotive trends relating to the financial purgatory we’re currently living through. Ford sent a memo to dealers last week indicating that it would be removing the minimum FICO requirement for 84-month financing, indicating that the industry may soon normalize auto loans that are even longer than the 72-month whoppers that have grown in popularity over the last several years.

Meanwhile, those needing a vehicle intermittently will find that rental rates have not been declining as hoped. Despite analysts previously suggesting that auto pricing may stabilize through the fall, we now look to be going into the holidays facing familiar high-priced troubles — and there’s really no reason to think that’s going to change after 2022 gets here.

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Car Loans Get Longer, Credit Scores Get Lower, and We're More Reliant on Automakers for Money and Cars Now

In news that will shock precisely no one, the current car blitz is partially fueled by longer loan rates, higher monthly payments and an increasing prevalence to finance our new cars from the automaker themselves — when we’re not renting it from them in the first place.

Experian released Wednesday its data on third-quarter sales and financing and found, on average, that borrowers’ credit scores were at the lowest level since before 2008. According to the credit agency, car buyers had an average credit score of 710 when they financed their car — which happens in 86.6 percent of car transactions, an all-time high.

Buyers opted for longer loans too. According to the data, new car loans longer than six years increased to 27.5 percent for the third quarter, up 17.1 percent from the same period last year. Loans between five and six years accounted for 44 percent of new vehicle financing.

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  • DenverMike Anyone that would have this color would wear feathers to a minister’s funeral.
  • Art Vandelay Still looks better than modern Hyundai/KIA products
  • Dukeisduke The F&I office on steroids.
  • DenverMike Yeah there’s temporarily gains, but automakers will continue to seek additional revenue streams as the auto industry will be in decline from now on, with new players taking an increasingly piece of the pie, plus weak EV profits. Prices are considered stupid, even by the rich that easily find better ways to dump cash, even on $200K Batmobile replicas. There’s never been so many (Hot) alternatives to “new” vehicles and all the BS/greed that goes along with them, including, yes better than new!Did I mention the auto aftermarket has been growing exponentially?
  • JMII I guess at one point OnStar had value but given that everyone has a smart phone these days I can't think of anything it does that I would pay for. The car has a OLM and reading the manual gives me all the other maintenance information I need. I unplugged the unit in my C7 just so the blue and red lights would disappear from my rear view mirror... I found them very distracting. Since my C7 was used I never signed up nor paid for anything, I have no idea what the data they are collecting on me but driving to and from work plus the occasionally track day doesn't seem like a gold mine.