Recently the 19th Annual Vehicle Finance Conference was held, and one of the topics that came up was the trend toward longer term loans. Many industry observers have assumed that this trend is being driven by the dealerships themselves persuading prospective buyers to opt for longer finance terms in order to afford more expensive vehicles. However, CEOs of both Santander USA and Ally Financial–two of the nation’s largest lenders–confirmed that this isn’t he case.
Rather, they said consumers are coming into the dealerships already knowing which vehicle they want, and the longer term loans are simply helping them lower their monthly payments. Ally Financial’s President of Auto Finance, Tim Russi, went on to state that the increased quality of the vehicles themselves is a very important factor. Basically, newer vehicles last longer than they used to, meaning they can outlast even longer term, 72-80+ month loans.
Auto Finance News first broke this story, and you can read their original post on the topic here: http://www.autofinancenews.net/lenders-not-afraid-of-longer-loans-at-afsa/