Average Car Loan Hits $785/Month With 6-Year Terms
Americans borrowed a record $211 billion for vehicles last quarter. Your car payment is likely crushing your budget.
Your car payment is probably too high. The average American is now shelling out $785 a month on their auto loan — and they're doing it for nearly six years straight. That's not a payment. That's a second rent check.
And the scale of this thing is staggering. Americans collectively borrowed a record $211 billion just to finance their vehicles in a single quarter. That's not a warning sign. That's a five-alarm fire for household balance sheets across the country.
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Think about what $785 a month actually costs you over a six-year loan term. You're looking at roughly $56,520 in payments before you even factor in what the car is worth at the end. Depreciation doesn't care about your monthly budget. Neither does your lender.
This is the kind of data that should make you rethink your next vehicle purchase entirely. Stretching loan terms to nearly six years is a classic sign that buyers are getting priced out but refusing to downsize their ambitions. Dealers love it. Your net worth hates it.
If you're in the market for a car right now, run the numbers hard before you sign. A longer loan term lowers the monthly hit but maximizes the total damage. The record borrowing figures suggest most Americans aren't doing that math — and lenders are counting on it. Continue reading at MarketWatch.com
