The long loans that were used to goose car sales a few years ago are back.
Finance managers say auto lenders are promoting loan terms of 72 months and even 84 months, as they did just before the credit markets crashed in late 2008.
"Customers have no aversion to signing longer-term notes these days," says Marv Eleazer, finance director for Langdale Ford in Valdosta, Ga. "I'm seeing 72-month loans at 120 percent [loan-to-value] and greater. I've even papered a few at 84 months."
In 2011, loans of 73 months and longer account for 9 percent of new-vehicle loans. That's up from 6 percent in 2009 and 2010 and close to the peak of 10 percent in 2008, reports consulting firm J.D. Power and Associates.
Loans of 61 to 72 months make up 40 percent of the loans written, J.D. Power data show.
The longer term lowers monthly payments, which appeals to many shoppers.
While unemployment remains high, consumers "just want their monthly payments cheaper," says Greg Faunda, business manager of Greenwood Chevrolet in Austintown, Ohio.