Shoppers continue to lean toward larger, more expensive vehicles and are using longer-term loans to offset rising monthly costs for affordability
Schaumburg, Ill.—As affordability remains a top priority across the automotive market, new data shows consumers continuing to lean on longer loan terms to help maintain manageable monthly payments.
According to Experian’s State of the Automotive Finance Market Report: Q1 2026, the percentage of new vehicles with loan terms more than six years old reached 35.55% in Q1 2026, up from 30.83% a year ago. Additionally, new loans with terms greater than 85 months increased from 2.95% to 3.33% over the same period.
A similar pattern was observed in the used vehicle market. The percentage of used vehicles with loan terms more than six years hit 31.54%, up from 28.60% in Q1 2025. Meanwhile, used vehicles with loan terms more than 85 months grew to 1.40% in Q1 2026, from 1.32% the year prior.
“Affordability continues to shape financing decisions across the automotive market,” said Melinda Zabritski, Experian’s head of automotive financial insights. “While shoppers continue to lean toward larger, more expensive vehicles, we’re seeing more consumers take advantage of longer-term loans to offset rising monthly costs.”
In the first quarter of 2026, the average loan amount for a new vehicle increased $2,150 year-over-year, reaching $43,925, while the average monthly payment for a new vehicle increased from $748 to $770 during the same period.
On the used side, the average loan amount saw an uptick of $785 from a year ago to $27,070 in Q1 2026, and the average monthly payment grew from $523 last year to $531 this quarter.
Interestingly, while the average monthly payment for new vehicles continues to rise, nearly 20% of new vehicles had an average monthly payment less than $500 in Q1 2026.
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