People, have we learned nothing from the financial crisis? Edmunds.com announced that in October the average length of a car loan was 67 months. And that's just the average. Nearly one in four new loans earlier this year was financed with a loan that lasted between 73 and 84 months, according to Experian Automotive.
I want to be clear: Any car loan greater than 36 months is a sign of financial irresponsibility.
I am not at all surprised that lenders pushing car loans—especially the financing arms of auto manufacturers—are offering these insanely long loan terms. They are in the business of needing to sell their product, and given that household income has not gone anywhere for years, they know the only way to move cars off the lot is to entice buyers by offering longer loan terms that magically make an unaffordable car look affordable.
And it's not as if a car dealer is ever going to recommend you buy a less expensive car to keep the payments affordable and get the loan paid off in just three years. No one with something to sell—something they sell on commission—is ever going to look out for your best interests.
But what bothers me is that so many consumers are falling for this.