The seven-year auto loan: America’s middle class can’t afford its cars

Source: Ben Eisen and Adrienne Roberts - The Wall Street Journal (Paid Registration)

Walk into an auto dealership these days and you might walk out with a seven-year car loan.

That means monthly payments that last well past when the brake pads give out and potentially beyond when the car gets traded in for a new one. About a third of auto loans for new vehicles taken in the first half of 2019 had terms of longer than six years, according to credit-reporting firm Experian PLC. A decade ago, that number was less than 10%.

Car loans that are increasingly stretched out are a pronounced sign that some American middle class buyers can’t afford a middle-class lifestyle.

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