Auto loans of 72-plus months hit nearly 30% in March

Dealers say more auto cash-strapped customers are seeking longer loans, resulting in higher negative equity. The number of 84-month loans has modestly increased in the past few months at U.S. Bank , Senior Vice President and Dealer Services Credit Executive David Hollodick told Auto Finance News . “It’s been a good performing segment for us based on how we underwrite things. … We’ve seen a little bit more demand for 84 [month terms],” he said. U.S. Bank’s indirect loan and lease originations, which mainly include auto, rose 2.7% year over year to $1.4 billion in the fourth quarter of 2025, according to the company’s earnings release. The national share of loans with terms longer than 72 months rose 510 basis points (bps) YoY to 28.8% in March, according to Cox Automotive data published April 10. In addition, 64% of 2,000 surveyed dealers and finance and insurance executives said more than 75% of their customers chose loans with 72-month terms or longer, according to a poll from payment provider AutoPayPlus published March 24. Negative equity The rise in longer loan terms comes as lenders and dealers are increasingly focused on controlling expenses in the wake of affordability pressures. However, longer terms also translate into challenging lending positions for consumers. The share of borrowers with negative equity rose to a record 620 bps YoY in March to 59.2%, according to Cox. While more consumers are pursuing longer-term loans, they are still trading in vehicles after three to four years, Robert Steenbergh , chief executive at AutoPayPlus, told AFN . Longer terms will trap customers in a trade-in cycle in which they accrue more negative equity before being unable to finance a new vehicle, he said. “What dealers need to look out to the future and see is, ‘I’m basically putting this guy out of the market, at some point for six, seven years,’” Steenbergh said. “There’s going to be too much [negative equity].” Around 90% of surveyed dealers and F&I executives reported encountering negative equity “frequently” or in “almost every deal,” according to AutoPayPlus. Monthly payment focus To lower customers’ monthly payments, lenders are financing older vehicles and different payment setups. Valley Park, Mo.-based subprime lender Midwest Acceptance has extended financing to 5- and 6-year-old vehicles to keep monthly payments manageable rather than extending terms past 60 months, Chief Operating Officer Ray Knapp told AFN . “If you put [consumers] in a payment out of their range, it’s a foregone conclusion that it’s going to be a loss,” he said. U.S. Bank launched used-vehicle leasing , an expansion of its certified pre-owned leasing program, in Q4 to provide more affordable vehicle financing, Hollodick said. He declined to provide figures on the program. “I’m surprised that leasing has not grown more than it has given the affordability [issue], because payments are less on lease than finance,” he said. The main financial challenges for consumers, AutoPayPlus’ Steenbergh told AFN , include: Rising vehicle costs; Still-high interest rates; and An uptick in inflation . “People get to where they think they can’t afford the [new] car,” he said. “That’s why used car sales are increasing so much.” AutoPayPlus offers bimonthly payments on auto loans. This gives consumers lower individual payments and pays off the loan principal faster, Steenbergh said. That helps dealers, too, as customers then have less negative equity and are better positioned to get their next car, he said. Auto Finance News will present multiple invaluable events for industry professionals in 2026, starting with Auto Finance Summit East and Auto Finance Capital Summit in May. To see event agendas and register, visit autofinance.live .

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Auto loans of 72-plus months hit nearly 30% in March

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