Light motor vehicle buyers are opting to finance their purchases over longer term contracts, according to Lightstone’s analysis of data gleaned from its Signio platform.
There are two consequences from this significant shift towards longer term financing contracts since 2015:
- Repayments are smaller and potentially more manageable for the buyer (although it is important to remember that the interest portion of the total repayment amount will be higher);
- The buyer will have a repayment obligation to the financing institution for a longer period.
Vehicle finance terms between 1 and 8 years (12, 24, 36, 48, 60, 72, 84, 96 months)
In 2015, the 72-month repayment window accounted for 73% of deals, and this six-year window has remained the standard with respect to vehicle financing, growing to as high as an 87% share in 2020, before slipping back into the 70s with a 72% share currently in 2025.
Ten years ago, 60 months was the second most popular financing window selection with a 17% share of the market, and 48 months was in third place with 3%. What all this amounts to is that, in 2015, close to 100% of the financed vehicle space was made up of deals amounting to six years or less.
Fast forward to 2025, and the second most popular financing term at 10% of market share is now 96 months – the longest financing window on record according to Lightstone’s data.
The 60-month term retains a spot in the Top 3, but the 84-month repayment period is now fourth on the list. So far this year, of all vehicle purchases financed, 89% have been signed for terms of six years or more, a significant shift from 2015!
Vehicle finance terms in the 6-year range (< 72 months, 72 months, > 72 months)
