New-vehicle auto finance conditions continued to dog consumers in the third quarter with daunting affordability conditions.

High vehicle prices and interest rates kept coupling to push many consumers into overly long loan terms, according to Edmunds, which said 69% of new-vehicle loans had 60-month-plus terms in the quarter, continuing this year’s trend. In fact, it said, 84-month terms are steadily increasing, up from 17% in the second quarter to 18%.

"Longer loan terms might make monthly payments more palatable for consumers, but the harsh reality is that most Americans don't want to keep their vehicle for seven years," said Edmunds Director of Insights Ivan Drury. "Simply put, longer loan terms put car owners at greater risk of rolling negative equity into their next auto loan."

New loans with monthly payments of at least $1,000 made up 17% of new-vehicle loans in a six-quarter trend, Edmunds said. 

In an August Edmunds survey, 62% of respondents said they’ve delayed buying a new car due to high interest rates. Though the Federal Reserve made a big cut to rates in September, the effect will take time to trickle down to auto loans. The average annual percentage rate was flat in the third quarter at 7%, Edmunds said.

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