Many Americans are behind on car loan payments and younger Americans are struggling with car loans the most. According to Experian, the average new car loan amount is $32,119, and the average new car loan term is 69.17 months. According to AAA, every 12 months that a car loan is extended costs an owner nearly $1,000 in additional finance charges.
Good debt typically has low interest rates (vs. expected inflation and investment returns) and the expected debt repayment period is substantially less than the expected economic life of the asset. Based on the average car loan term (almost 6 years) and the fact that a car depreciates the second you drive it off the lot, many Americans are making poor debt choices.