The COVID-19 pandemic has disrupted supply chains for just about every industry — and the auto industry was certainly not spared. A shortage of microchips along with an increase in demand for cars caused prices to shoot through the roof, even for used cars.
And as prices shot up, so did the average length of auto loans.
A new survey from LendingTree found that loan lengths were getting shorter before the pandemic, hitting a low in November 2020, at 59.9 months on average, before shooting up to a three-year peak in July 2021 at 65.6 months. LendingTree analyzed more than more than 29,000 auto loans that closed on its platform between Oct. 12, 2018, and Oct. 12, 2021.
Considering a longer loan term can mean lower monthly payments, it makes sense that consumers would opt to stretch out the length of their loan during tough financial times brought on by the pandemic.
“Ram buyers followed closely behind Tesla, with an average of 66.3 months. The only car make that was below a 60-month average was Mini, at 59.7 months.”
While loan lengths increased overall in 2021, the survey found Tesla
buyers take on the longest loan terms, at an average of 67.1 months. That’s compared to an average of 64.6 months for all loan lengths throughout the first 10 months of 2021.
Ram buyers followed closely behind Tesla, with an average of 66.3 months. The only car make that was below a 60-month average was Mini, at 59.7 months.
Teslas can be pricey, going for anywhere from around $45,000 to more than $100,000, depending on the model. In comparison, the average price for a new vehicle in September was around $45,000 — an all-time high, according to data from Kelley Blue Book.
Tesla share prices fell Monday after CEO Elon Musk tweeted about selling stock over the weekend. The billionaire polled his 62.8 million Twitter
followers as to whether or not he should sell 10% of his stock, promising he would “abide by the results of this poll, whichever way it goes.” Nearly 58% voted “yes.”