Length of car loans is increasing

As car prices continue to rise, some auto loan terms have lengthened to a whopping 96 months, or eight years. It's an attempt to make monthly payments more affordable for consumers, but financial experts say such lengthy auto loans can be a bad idea. The average price of a new automobile is $31,200, says Kelley Blue Book. To make that more palatable for consumers, lenders are allowing them to spread payments over more years. In March, nearly one-third of auto loans were for 72 months or longer, a record high, according to J.D. Power and Associates."It used to be that 36 months was considered a standard loan," said Mike Sante, managing editor of Interet.com. Because vehicles last longer today, consumers might justify taking a longer loan. The average age of a vehicle today is 11.

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