TULSA, Okla. — If you're car shopping, it's not hard to see new and used vehicles are expensive. To make buying a new ride affordable, nearly half of all buyers that finance a new or used vehicle are stretching the loan to six years — and sometimes longer, according to a LendingTree study.
And that comes with serious financial risks.
"We're paying for our new and used vehicles for a really long time, and it's only getting longer," said Matt Schulz of LendingTree. "It's not that uncommon anymore to have an auto loan that is 6 years long, and there are plenty of folks out there who are financing their vehicle for 7 or more years, and that's a really, really long time, especially considering how fast the value of any vehicle depreciates. It's really easy to end up being underwater on your car, or your truck, or your SUV, where you end up owing more than that thing is worth."
The LendingTree analysis of 70,000 consumers with active auto loans found that 47.5% of Americans with auto loans have terms longer than 72 months and 7.6% with terms longer than 84 months.
Gen X leads the pack with over half taking out loans of longer than six years. Among Gen X borrowers, 53% have terms longer than 72 months, and 7.7% have terms over 84 months.
Average monthly payments are climbing too. For Gen X, it's now just shy of $600 a month — with almost 10% paying more than $1,000. Gen X borrowers have the highest average monthly payments at $594, and 9% of Gen X have auto loan payments of $1,000 or more.
Overall, 5.3% of borrowers pay $1,000 or more per month.
Tulsa consumers have rate advantages
While national trends show concerning payment increases, Tulsa-area consumers have access to significantly better financing options than the national average.
Local rates from TTCU Federal Credit Union range from 5.49% APR for new vehicles to 6.24% APR for older used vehicles. Bank of Oklahoma offers rates between 5.54% and 5.74% APR for both new and used auto loans.
"The most important thing to do is to really understand what you can actually afford," Schulz said. "Oftentimes, you will be able to borrow more than you really can afford, and being able to know the difference is really, really important."
Calculate total costs before shopping
Schulz recommends using online affordability calculators before heading to the dealership. LendingTree and other sites offer calculators that help determine realistic budgets based on income and expenses.
"A lot of us get kind of blinded by getting the right monthly payment or getting a specific sticker value on a car, but there's more to it than that," Schulz said. "You have to factor in your down payment, your financing, what your monthly payment is, how long you're going to be paying — all of these things matter a lot."
Don't forget to factor in costs beyond your car payment — like insurance, maintenance, fuel, and other expenses that can put a squeeze on your budget.
"When we're looking to buy that newer used car, we're always focused on the monthly payment or on the sticker price, but we forget about a lot of the other costs," Schulz said. "It really is important to take into account all of the various costs that go into that purchase, because all of that really factors into just whether that new car, truck, or SUV is actually affordable for you."
Key considerations for long-term loans
Financial experts warn that longer loan terms create several risks:
- Negative equity: Vehicles depreciate faster than loan balances decrease, leaving borrowers owing more than the car is worth
- Higher total interest costs: Even with lower monthly payments, longer terms mean paying more interest over the life of the loan
- Limited flexibility: Being underwater on a loan makes it difficult to sell or trade the vehicle
This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
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