Jan 11, 2026
Car buyers are running into a hard truth: new vehicles cost far more than they did just a few years ago, and increased monthly payments have followed.
To keep those payments down, some borrowers are stretching auto loans to unprecedented lengths, including 100-month terms, or more than eight years. At first glance, the appeal is obvious; a longer loan can shave hundreds of dollars off a monthly payment, making a $50,000 car feel manageable in a way that a traditional five-year loan doesn’t. For families squeezed by inflation and higher interest rates, that tradeoff can feel necessary.
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To make the math work, both buyers and lenders are pushing loan terms further than ever before. What used to be a five-year commitment has quietly stretched to six, seven, and now eight years, which raises questions about whether longer loans are solving an affordability problem, or simply spreading it out over time.
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Why rising car prices are pushing loans to extremes
In the fall of 2025, the average price of a new car topped $50,000, according to Kelley Blue Book (1). And those higher sticker prices translated directly into bigger loans, as the average monthly payment climbed to a record high of $758 in late 2025, according to J.D. Power (2).
For many American households, that kind of monthly payment simply doesn’t fit in the budget, which is why buyers and lenders are turning to longer terms. Experian data shows about one-third of buyers now take loans lasting at least 72 months, and a growing slice are stretching loans to 85, 96, or even 100 months (3).
“We don’t have $300 monthly payments any longer in new vehicles,” Pennsylvania dealership operator David Kelleher told The Wall Street Journal (4). “It’s a thing of the past.”
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The hidden costs of 100-month loans
Longer loans do what they promise: they lower the monthly payment, but that relief comes with serious tradeoffs.
For example, let’s say you took out a $50,000 car loan at 5% interest. Over five years, the payment would be roughly $950 a month, with about $6,600 paid in interest. Stretch that same loan to 100 months and the monthly payment drops to around $600, but total interest climbs to around $10,000. With the longer term, you can save money each month, but you’ll end up paying far more in interest over time.
There’s also the risk of being underwater, which means owing more on the loan than the car is worth itself. Vehicles depreciate the most in the first few years, while long loans reduce principal slowly. That combination can leave borrowers trapped in a vehicle they later don’t like or becomes unreliable.
“Consumers tend to shop for vehicles based on monthly payment,” said Melinda Zabritski, head of automotive financial insights at Experian. “Although we’re beginning to see interest rates slowly decline, affordability remains top of mind for many shoppers. It’s not surprising to see some shoppers explore the idea of extending loan terms to secure a lower monthly payment.”
How to decide if a longer car loan makes sense for you
A 100-month loan isn’t automatically reckless, but buyers would be wise to consider it a last resort.
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The key is separating payment affordability from true cost. Start by asking yourself whether the new car that you desire is the problem. With fewer new models priced under $30,000, many buyers feel boxed in, but alternatives exist: certified used vehicles, smaller models, or delaying a purchase until prices or rates improve. A cheaper car with a shorter loan often costs less overall, even if the monthly payment is similar.
If a longer loan is the only way to make the numbers work, look closely at your future. Will the car still meet your needs six or seven years from now? Are you comfortable paying for it long after warranties expire? Extended loans can make sense, but only if you plan to keep the vehicle for the long haul.
Buyers should also focus on total interest, not just the monthly payments. Running the numbers on five-, six-, and eight-year terms can be eye-opening. In some cases, a slightly higher payment over a shorter term saves thousands.
Finally, protect flexibility. A larger down payment, gap insurance or making extra principal payments early can reduce the risk of being underwater. And if your budget is already stretched, that’s a signal to rethink the purchase.
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Kelley Blue Book (1); J.D. Power (2); Experian (3); The Wall Street Journal (4)
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Chris Clark is a Kansas City–based freelance journalist covering personal finance, housing and retirement. A former Associated Press editor and reporter, he writes plainspoken stories that help readers make smarter financial decisions.
