How Many Car Buyers Are Extending Their Loans?

The average monthly loan payment has never been higher and to help offset higher prices, longer loan terms are becoming the norm as well. These lengthy terms may offer initial relief in the F&I Office at the time of purchase, but it puts additional strain on customers over the course of the loan. 

These customers will take longer to reach positive equity, increasing the chance of purchasing a second car. The longer until that second purchase, the less likely the customer will return to buy from the originating dealership. 

Just how many people are extending their loans and putting themselves in this position?

4 out of 10 Buyers Extend their Loans To Fit Their Budget

In our monthly Ease of Purchase survey, we ask recent car buyers a number of questions about their experience buying a car. Over the past quarter, we added new questions about how the more than 1,000 customers addressed their monthly budget. 

Nearly half (47%) of buyers said the initial loan term and monthly payment they received when financing did indeed fit their budget. But 41% admitted they decided to extend the loan to stay within their monthly budget.

Most of these “flexible” buyers (19% of the total) extended their loan a single year. Another 11% added two years, while another 11% added three or more years. These results suggest that once in the F&I Office, buyers will go back and forth on payments until the monthly number is something they can digest. 

Buyers Who Lease Don’t Extend the Term

Interestingly enough, very few new car buyers who lease adjust the term to help with their budget. Leasees are often more accustomed to higher payments as a large number are luxury car buyers. One part of the allure of leasing is also the idea that it’s a short-term proposition. Essentially, these customers want a new car more often and they’re willing to pay for it. That’s likely why just 6% opted to extend their term to fit the purchase into their budget. 

Lease shoppers are also focused on special deals with more than a third saying they took advantage of incentivized lease terms to hit their financial targets. 

The automotive retail industry is at an interesting inflection point as the number of levers dealers can pull to tackle their customers’ affordability worries remain limited. Luckily, the negative impact of longer finance terms is becoming a more common topic in both traditional and social media. And dealers are increasingly advising their customers about the pros and cons of very lengthy loans. The side effect for the dealer is that the longer the loan, the longer before a customer returns to replace that car, which will impact the health of the store long term.

What Dealers Need To Know

• More buyers are turning to longer loan terms to keep monthly payments affordable.
• Four in 10 financed buyers extended their loan term to stay within budget. 
• Nearly one in four buyers added two years or more to their loan term.
• The most common adjustment was extending the loan by one year.
• Lease customers were far less likely to extend term lengths, with only 6% doing so.

Source: CDK Ease of Purchase Survey, Q2 2026 (n=1,000+ recent vehicle buyers)