A report by the Consumer Bankers Assoc. found that auto dealers and lenders are continuing to increase the length of car loans as a result of an increase in consumers who demand low monthly payments, according to Automotive News.

The report said loans greater than 60 months accounted for 55.3 percent of its members' new vehicle loans in 2005, up 10 percent from the previous year. That figure includes loans made by banks and a few automakers’ captive finance companies, according to the report, with loans by large banks tending to be for longer terms than captives’ loans.

The CBA report also pointed out that only 21 percent of new-vehicle loans were longer than 60 months in 1999. Most of last year’s increase came in loans of 61 to 72 months, with loans longer than 72 months also rising.

Longer loan terms enable customers to buy pricier vehicles at an acceptable monthly payment. That can mean fatter profits for automakers, dealers and lenders, however the longer loans also stretch the interval between new-vehicle purchases.

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