It turns out the latest indicator of household financial strain isn't in credit cards or mortgages — it's sitting in the driveway. Car prices haven't gone down and interest rates have barely budged this year. To make payments fit, more buyers are stretching their auto loan terms further than ever.
A report from Edmunds last month showed a few unsettling records, as 22.4% of shoppers are using an 84-month or longer loan term to finance a new vehicle, up from 20.4% in Q1 2025 and just 17.6% a year earlier. With higher prices and longer loan terms, consumers are battling more debt, slower payoff, and rising delinquencies — even among borrowers with strong credit.
