A new car you never really own

“Walk into an auto dealership these days and you might walk out with a seven-year car loan,” said

Ben Eisen and Adrienne Roberts. A third of the loans for new vehicles in the first half of 2019 had terms of longer than six years. A decade ago, that number was less than 10 percent. New cars tricked out with more technology are getting more expensive, and consumers aren’t helping themselves, either, veering “toward pricier rides such as sport-utility vehicles that tend to dominate auto showrooms.” Americans have been borrowing to buy their cars for decades, but auto debt has swelled since the financial

crisis. Why? Low interest rates have made it “much cheaper to finance a car.” Dealers, who either hold a portion of the interest rate or get a one-time payment from the lender, “now make more money on the loans their customers take than on the cars they sell”—an average of $982 on loans and insurance for each new vehicle, versus $381 on the sale. But “the availability of loans with longer terms has created an illusion of affordability,” helping fuel car purchases that otherwise would have been out of reach—and leaving many buyers underwater before they drive off the lot.