AutoPayPlus, an automated financial service provider, released findings of a survey examining the impact of extended auto loan terms on dealership sales and customer purchasing cycles.

The survey, conducted in March with more than 2,000 automotive dealers and finance-and-insurance executives, found 64% of dealers say more than three-quarters of their customers are choosing loan terms 72 months or longer.

Additionally, 76% of respondents said they are “extremely concerned” that extended loan terms are keeping customers out of the market longer, disrupting repeat purchase cycles.

Negative Equity and Affordability Challenges

The survey also found that 90% of dealers frequently encounter negative equity or in nearly every deal, reflecting challenges tied to higher vehicle prices and longer loan terms.

When customers owe more than a vehicle’s value, trade-in activity can slow, affecting showroom traffic, inventory turnover and repeat business.

When asked about the biggest threat to 2026 sales goals, nearly 60% of respondents cited customer cash flow and budgeting challenges. This exceeded concerns about high vehicle prices (26%) and interest rates (14%).

Revenue Opportunities and Industry Response

The survey found that 85% of respondents believe dealerships may need to shift toward recurring, service-based revenue models. However, 75% said they were unaware that biweekly payment servicing could be structured as a reinsurable, tax-deferred product.

“The industry has focused heavily on interest rates, but customer payment capacity remains a key issue,” said AutoPayPlus founder and CEO Robert Steenbergh.