Car loan interest rates are reaching record highs and taking longer than ever to pay off

As car dealerships compete for business in the increasingly crowded market, more and more people are finding themselves signing car loans with higher interest rates and longer payoff periods than ever before. According to a recent report, average car loan rates reached an all-time high in the first quarter of 2021, with some lenders offering rates as high as 29%. Additionally, the average length of car loans has increased to over 69 months, leaving borrowers on the hook for payments for more than five years. This trend has left some experts worried about the impact on consumers’ financial stability, as longer loan periods mean more interest paid overall and a higher risk of default if the borrower experiences a financial setback. While the convenience of owning a car may be worth the cost for some, it’s important for consumers to carefully consider the terms of their loan before signing on the dotted line. With interest rates continuing to rise, now may be the time to consider alternative transportation options or to explore different financing options, such as leasing or buying a used vehicle. In the end, it’s up to each individual to weigh the benefits and risks of owning a car on loan and to make the decision that’s right for them.