Long-term loans are in high demand from consumers, largely because they result in lower monthly payments. Most come in the form of five- to six-year loans, but Experian Automotive has found that loans in the 73- to 84-month range accounted for 12.8% of auto loans in the third quarter, a rise of 10.3% from the same quarter last year.
That increase made the bracket the biggest gaining loan category last quarter when compared with 3Q11.
As the frequency of 84-month paper escalates, a few automakers are reluctant to go that distance. “It just takes too long for the customer to get in an equity position,” said Tom Doll, chief operating officer of Subaru of America Inc. “People are going to 60 months, 72 months, but we’re trying to stay away from 84 months.”
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