New reports indicate that a 97-month car loan will become the norm within the next five years to serve as one way to help people make their monthly car payments on time according to Yahoo.
In the past, people could expect a 5-year loan, but now 75 or 95-month loans have been introduced for buyers looking to lower their monthly payments.
The new loans are an answer to increasing car prices, as well as to lender competition to pull in the buyers.
Ford Motor Credit, Ford's in-house lending company, allows people 59 to 60 months on new car loans the past five years.
"We don't want to keep buyers out of the showroom longer than that," said Margaret Mellot, a Ford spokeswoman according to The Wall-Street Journal.
But longer the car loan is means more of a risk for carmakers, who also worry that deals like 70-90 month loans will keep consumers from replacing their vehicles.
"It's the same sort of thing we saw in 2007," William White, a former economist at the Bank for International Settlements, said to Reuters. "People get driven to do riskier and riskier things."
The average price for a new vehicle is up to $31,000, or $3,000 more than it was just four years ago. In a still growing economy, monthly car payments have decreased from $465 to $460 thanks to lower interest rates and longer loans.
The longer loans can also provide a way to keep monthly payments under $500 a month, which gets cars out of a car lot quicker according to The Wall-Street Journal.
The average length of a car loan in 2012 reached 65 months, the longest ever allowed in the U.S. Now loans well over 70-75 months have become normal.
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