Average new Car loan hits $44,664 with record 84-month terms

Check your next Car contract carefully before you sign. New Car prices are hovering near $50,000, and buyers are taking on massive debt to keep up. A new report from the Car research firm Edmunds shows the average loan amount has jumped to $44,664. That is a significant increase from just a year ago. To make the monthly numbers fit, more people are stretching their loans to 84 months or longer. This is now true for over 25 percent of all new Car buyers. The average monthly payment has climbed to $787, but for one in five buyers, that bill is now over $1,000. Even used Car buyers are seeing these high payments. Ivan Drury, the director of insights at Edmunds, warns that shoppers must look at the total cost of the vehicle. Stretching a loan to seven years means you are paying much more in interest to the bank. The average buyer is now paying $9,938 in interest over the life of their loan. That is nearly $10,000 extra that goes to the lender, not the car. 'Stretching out a loan shouldn't be a way to talk yourself into a vehicle that doesn't make sense for your budget,' Drury says. Do not just look at the monthly payment today. Think about what you are committing to for the next seven years. If you buy a $45,000 car, you might end up paying $55,000 by the time the loan is finally paid off. It is easy to get a new car, but it is much harder to pay for it.