Car prices climb, auto loans get longer

Car loans are getting longer as prices for both new and used vehicles continue to rise.

A new Experian Automotive report earlier this year found nearly a third of car loans exceeded six years. Experian is a global data and technology company that tracks the automotive finance market. The average new vehicle loan nationally is about five years and nine months, according to data from OnPoint Community Credit Union. The average loan for a used car is around five years and seven months.

Car loan durations typically hovered between three and four years several years ago, said Amy Reeves, OnPoint’s senior vice president Southwest Washington regional manager.

They were likely shorter terms because of lower interest rates, and thus lower car payments, she said. Higher interest rates add on to monthly payments, which push some buyers to lean toward longer loan terms to help make the new monthly loan payment more affordable.

A Kelly Blue Book report showed new vehicle prices are up 1.2 percent compared with May 2025.

The average loan for a new car is $44,000, Reeves said, with average monthly payments of $770 — up from $748 a year ago. Used car loans average $27,000 with an average monthly payment of $531, which is up slightly from $523 last year.

Reeves said roughly 20 percent of new vehicle buyers have monthly payments under $500.

“You want to establish a realistic budget and start researching your financing options before you even begin shopping,” Reeves said.

Customers regularly come into Clark County OnPoint branches expecting to take out car loans with $250 monthly payments for a brand-new car, Reeves said.

“Then we bring them to reality with interest rates and what they’re wanting to finance,” Reeves said. The difference between reality and expectation, she added, is drastic.

Reeves recommends car shoppers consider the full cost of vehicle ownership when making a purchase — the loan, insurance, fuel, maintenance, registration.

“It’s not just the monthly payment,” she added.

She recommends doing due diligence when car shopping, as well, by studying car maintenance records and researching future maintenance costs.

Getting pre-approved for a loan also gives customers a better idea of which cars comfortably fit within their budget.

“Ultimately a vehicle should support your financial goals, not create unnecessary financial stress,” Reeves said.