Smart Borrower Blog

Truck Popularity Pushes Average Loan Terms to New Highs

May 2nd, 2018 @ 8:25 PM by Amber Nelson

U.S. consumers love their trucks and SUVs – and lenders are having to get creative again with financing in order to satisfy demand.

According to consumer credit company Experian, the average loan term for truck and SUV purchases has grown to record levels. The Ram truck brand, owned by Fiat Chrysler Automobile NV, had the industry high in 2017 with 73 months – more than six years – for consumers to pay off their vehicle loans.

Extending auto loan terms out so long is a risk to lender and borrower as the truck or SUV will likely be worth less in a few years than the amount still owed. If a borrower falls on hard times, it would be tough to sell their vehicle and still come out ahead.

“If they keep pushing the term out, they will be upside down,” said Melinda Zabritski, a senior director at Experian. “They may have to keep the car a little bit longer, or they have to come up with more cash.”

Mitsubishi and Jeep truck and SUV brands have seen their loan terms stretched to an average of 72 months, while Chevy’s loans have reached 71 months and Fiat’s average 70 months.
“I don’t think we’re going to see any reduction in terms until we see changes in pricing or what consumers are buying,” said Zabritski. “If anything, we’re starting to see more lenders who would previously do a 72- or 75- move into the 84-month loan category.”

And American appetite for trucks is not waning. Light trucks now make up more than two-thirds of all U.S. car sales. As those vehicles get fancier bells and whistles, the prices also keep climbing, pushing them farther and farther out of many consumers’ true price range and into riskier auto loans.

About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to and

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