Auto loans are taking longer to pay off

Kai Ryssdal and Bennett Purser Oct 2, 2019
HTML EMBED:
COPY
Ford F-150s are lined up at a dealership in Hudson, Wisconsin. Karen Bleier/AFP/Getty Images

Auto loans are taking longer to pay off

Kai Ryssdal and Bennett Purser Oct 2, 2019
Ford F-150s are lined up at a dealership in Hudson, Wisconsin. Karen Bleier/AFP/Getty Images
HTML EMBED:
COPY

With an influx of new technology and safety features, cars have never been more expensive. But wages in the United States haven’t risen nearly as fast, so to get cheaper monthly payments, more consumers are taking out auto loans for longer periods of time.

This strategy might appear helpful upfront, but after several years of interest, borrowers end up paying much more in the end. Nearly one-third of all auto loans taken in 2019 are long term. Many dealerships today make more money from selling loans than selling cars.

Ben Eisen wrote about auto loans for the Wall Street Journal. He spoke to “Marketplace” host Kai Ryssdal about how they’re affecting middle-class consumers.

“It’s just gotten harder and harder to maintain that middle-class lifestyle,” Eisen said. “Everything’s gotten more expensive, the biggest things have gotten more expensive, and yet incomes haven’t risen to keep pace.”

Click the audio player above to hear the interview.

Marketplace is on a mission.

We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.

Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?

Your donation is critical to the future of public service journalism. Support our work today – for as little as $5 – and help us keep making people smarter.