- an online loan website has released results of a harris poll survey showing how americans approach getting an auto loan.
- a third of respondents didn't know what the apr on their loan was, lendingclub reported.
- based on the survey, only 59 percent of recent buyers did any research into auto-loan options at all.
americans are paying more for their auto loans than they ever have, as we recently reported, and accepting the longest loan periods ever seen, averaging 60 months. although there is not a simple explanation for this phenomenon, americans' habits in researching loans aren't helping.
harris poll conducted a survey in may 2019 for lending club in the form of a questionnaire answered by people who had purchased, financed, or leased a vehicle in the preceding year, as well as those who intended to do so in the coming 12 months. nearly half of those surveyed said that they were more likely to research what to watch next on tv than inquire about financing options for an auto loan. the study found that a lack of information regarding their auto loans was also rampant among buyers, with one-third reporting that they didn’t know what their apr was, and 40 percent unaware what apr they should expect for a loan.
on top of that, 37 percent of buyers surveyed said they didn't feel it's worth researching rates such as loan length and apr because they’re non-negotiable. although the process of researching auto loans can be tedious, not doing so could translate to buyers overpaying for their loan or getting a car they can’t afford, and as the website suggested, could result in huge amounts of money left on the table that car buyers could be saving.
americans are taking out long-term leases at unprecedented rates; in the first half of 2019, roughly a third of auto loans for new vehicles had terms longer than six years, which is up from 10 percent of loans a decade ago, according to experian. the average length for a loan is 69 months. longer lease lengths give americans the illusion that the car they're getting is affordable, as the wall street journal concluded.
as a result of buying cars they can’t afford, more and more americans—33 percent through the first nine months of 2019—who trade in their cars are doing so with negative equity, meaning they still owe money on the car they're trading in. this is up from 19 percent a decade ago.
so, researching whether to not to binge-watch game of thrones may be more enticing than researching how and where to get an auto loan, but the latter can save you money, and fund your hbo subscription.