Auto loans come in all shapes and sizes in order to accommodate the budgetary goals of members. In an effort to meet these needs, credit unions have found it necessary to provide extended loan options. A decade ago the average auto loan remained fixed at 60 months. However, this has changed with the average loan term for new vehicles at 68 months and 66 months for pre-owned, as reported by Experian Automotive. With that in mind, credit unions remain committed to providing this option to members as it allows them to be competitive in the marketplace. The average loan term is expected to climb as prices of vehicles continue to rise. Meanwhile, consumers look toward capping monthly payments at a threshold they are comfortable with.

The incentive for extended loan terms lies with a person's perception of what they can afford each month, rather than how much they will be paying over the life of the loan. Rate alone is not as strong a consideration as staying under a desired amount in the consumer's eyes. In 2015, the average monthly payment on a new car loan was $483; a year later, it's $493 – up by 2%. Francis Collins, SVP for Teachers Federal Credit Union in Hauppauge, N.Y., has found, "Offering a flexible long term payment plan is beneficial to those members who are working on a tight monthly budget." As car loans continue to slide past the five-year mark, credit unions realize obtaining a good interest rate, and a reasonable monthly payment, is a goal they must meet for members.

The ability to finance a vehicle that would have been out of reach in a five-year payment plan has created the need to push loans out further. Vehicle costs continue to rise, as does the appetite for more technology and features. Experian Automotive reports the average amount financed on a new vehicle is $29,551. According to the Bureau of National Statistics, this is up by 25% in the last decade, when the average cost of a vehicle in 2006 was $23,629. Chuck Price, vice president of lending for NEFCU in Westbury, N.Y., found, "Longer loan terms allow members to purchase more expensive vehicles by making the payments more affordable."