KSHB 41 reporter Abby Dodge covers consumer issues, personal budgeting and everyday spending. Share your story idea with Abby.
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The Federal Reserve Bank of Kansas City said in its Beige Book released this week that more people are buying cars, but taking longer to pay them off.
The report states "consumers reportedly took on long-term financing (often more than 72 months) to reduce monthly auto payments in an effort to manage household budget constraints."
LendingTree said the average car loan term is between 67-68 months, with Americans taking out $184.2 billion in new auto loans during the third quarter of 2024.
Anower Hosen and his family bought an older vehicle to keep costs low.
"I'll pay cash or zero percent interest rate," Hosen said. "That’s all."
For those who do have a loan, like Tiffany Gillette, it's about risk mitigation.
"So when I have a car payment, it's loaned, a new car," she said. "I'm thinking all the problems that come with it are going to be mine."
Behind mortgages, car debt is the second largest category for Americans, totaling more than $1.6 trillion.
"I definitely think the cost of life has a lot to do with it," driver Kurt Murray said. "I think a lot of people don’t take the length of the loan into account. They are just looking at the monthly payment at the end of the day."
Murray needed a new vehicle to carry his growing family. He decided to lease a crossover vehicle for a few years before making a big purchase.
"I know this car fits two car seats," he said. "That is the reason I got this one and then we will make that decision a few years down the line."
After checking all the boxes at the DMV, Murray was excited to get on the road to a new chapter of life.
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