--- title: "One in Five New Car Buyers Opted for 84-Month Financing Last Fall" date: "2023-01-14" modified: "2023-01-14" authors: - name: "Aaron Cole" job_title: "Contributor" link: "https://www.thedrive.com/authors/aaron-cole" url: "https://www.thedrive.com/news/one-in-five-new-car-buyers-opted-for-84-month-financing-last-fall" categories: - "Car Buying" - "News" --- # One in Five New Car Buyers Opted for 84-Month Financing Last Fall ![]() *\Getty\* Rising [interest rates]() and increasing costs to borrow money had a predictable result last year: more carbuyers turned to longer car loans for lower monthly payments. Nearly one in five carbuyers by the end of Oct. 2022 had a seven-year loan to purchase a new car, and almost one in 10 used carbuyers opted for a seven-year loan, [according to *Automotive News*](). Those 84-month financing terms are almost certainly due to rising costs to borrow money, and reportedly even some [new-car debt]() was even longer. Automotive News quoted a Hyundai financing dealer who said 60% to 70% of new car loans at her dealership were 84 months long or longer. “It’s insane,” Headquarter Hyundai (Sanford, Florida) Finance Director Jasmine Figueroa told Automotive News. That’s a nearly twofold increase in the number of 84-month loans since 2018. Credit bureau Experian said that by the end of fall 2018, 10.5% of new car loans and 4.1% of used car loans were 84 months long. In four years, those numbers have roughly doubled—to 19.3% and 10.3%, respectively, in 2022. The figures for 2022 represent the largest increase in those seven-year loans, year over year, too. Last year, 15.2% of new car buyers and 7.5% of used car buyers opted for a long loan. It's not hard to see why. Today’s federal funds rate, which sets a baseline for how expensive it is for banks and credit unions to borrow money, is between 4.25% and 4.5%, compared to just a year ago when that rate was nearly 0%. In fact, the federal funds rate is the highest today as it’s been in 15 years to cool inflation. [Buyers fixated on a monthly payment]() vs. overall cost would likely trend toward longer-term loans. For qualified buyers, new car loan rates can start between 4.5% and 7%, with higher rates for longer loans. A five-year car note at 4.5% for $20,000 borrowed nets a monthly payment of about $380 versus a seven-year loan at 8% can save about $50 per month. Over the life of the loan, however, the payout on the seven-year loan is roughly $10,000 more than the five-year loan. As interest rates stay level, or even rise, it’s likely that a seven-year loan could become more common—even surpassed, according to Figueroa: "I'm waiting for someone to tell me they have a 10-year loan on their car." *Got a tip? Send it in to tips@thedrive.com* ## Author Aaron began his career in journalism when the news was printed on dead trees and thrown on driveways. A graduate of the University of Utah, he began his career as a sportswriter and has covered news for over a decade. ### Author social links [Twitter]() [Instagram]()