Richmond Hill, Ontario – New-car buyers who finance their vehicles through the dealership are opting for longer-term loans, in some cases as much as 84 months or more, according to new information from J.D. Power and Associates.
From the beginning of 2010 to the middle of June, 43.3 per cent of all retail finance contracts taken out at dealerships were for 60 months. Loans for 72 months are now almost 17 per cent of all vehicle financing, and loans of 84 months or longer represent 18 per cent of the retail finance business.
Loans of 72 months or longer now account for 29.4 per cent of all subcompact car financing, and 27 per cent of all compact crossover financing.
There has been a higher percentage of 84-month and longer loans for midsize crossovers than in most other segments, while midsize vans have the highest rate of 84-month and longer contracts, at 33.6 per cent.
In the compact premium luxury segment, 48-month loans are more prominent than in any other segment, accounting for two out of every ten loans. Midsize and large pickups are most likely to have 72-month loans, far exceeding the industry average.