Experian Automotive reported that nearly one-third of automotive loan terms exceeded six years in the first quarter of 2026. Average terms reached 69.48 months for new vehicles and 67.73 months for used vehicles, while 30- and 60-day delinquency rates edged higher year over year.
Extended terms can make a monthly payment fit, but they also keep principal outstanding longer and may increase total interest and negative-equity exposure.
What F&I should explain
Customers should see the payment difference across reasonable terms, the corresponding total interest and the point at which the vehicle may be expected to hold positive equity. The comparison should be individualized; average market terms do not determine what is affordable or appropriate for one buyer.
What management should watch
Stores can compare long-term penetration with vehicle age, mileage, advance, credit tier and expected ownership. A long loan on a high-mileage used vehicle creates a different risk profile from the same term on a new vehicle with strong warranty coverage.
Delinquency context also needs care. Slightly higher early-stage rates do not prove that every lender is tightening or that every borrower segment is deteriorating equally.
Experian's proprietary dataset and category definitions control the reported measures.
Cited references
- Experian State of the Automotive Finance Market report — Commercial credit-market report