One in four financed new-car buyers is now signing up for at least seven years of payments. As vehicle prices remain high and delinquencies rise, repossession is becoming the final consequence of a much longer affordability problem.

Alicia went to sleep knowing the numbers were getting harder to make work. Nine months earlier, she had lost her job as a government contractor in Washington, D.C., and despite searching, she had been unable to find another position. Before the layoff, she had purchased a 2023 BMW M3 through Carvana, financing the roughly $85,000 car through Capital One. It had factory upgrades and only about 20,000 miles. After her income disappeared, the bank allowed her to defer one payment and move three others to the end of the loan. But there was a limit to how much flexibility it could offer. One night, after tossing and turning over her finances, Alicia — whose name has been changed to protect her privacy — finally fell asleep. When she woke up, the BMW was gone.

Her experience sits inside a much bigger change in how Americans are paying for cars. According to Edmunds’ third-quarter 2026 financing data, 25.5% of financed new vehicles now carry loan terms of 84 months or longer — more than one in four buyers and the highest share Edmunds has recorded. A year earlier, the figure was 21.8%. Stretching the debt across seven years should lower the monthly burden, but buyers are extending their loans while still taking on record payments. The average financed new-car payment reached $787 in the third quarter, while 21.2% of buyers committed to payments of at least $1,000 a month. Buyers financed an average of $44,664, another record.

That helps explain why the seven-year loan is less a sign that vehicles have become affordable than evidence of how difficult affordability has become. With the average new-car APR still around 7%, extending a loan allows a large purchase to be divided into more payments, but it also keeps the borrower in debt longer. Edmunds calculates that the average interest paid over the life of a new-car loan reached a record $9,938 in the third quarter. The average loan term is already above 70 months. A seven-year obligation can therefore stretch across job changes, recessions, major repairs, family emergencies and other financial disruptions that were impossible to predict on the day the vehicle was purchased.

Meanwhile, Americans are carrying more automobile debt overall. The Federal Reserve Bank of New York reported that auto-loan balances increased by $28 billion during the second quarter of 2026 to $1.71 trillion. The bank also found that transitions into early auto-loan delinquency increased slightly and described new auto-loan delinquencies as remaining at elevated levels. Those numbers do not mean every struggling borrower will lose a vehicle, but they show how much household debt is tied to an asset many Americans need simply to get to work. Once income is interrupted, the transportation needed to find the next job can itself become another financial vulnerability.

Repossessions have been moving higher as that pressure has built, although the scale requires some context. Industry estimates compiled by Cox Automotive previously projected repossession volume returning to roughly 1.7 million vehicles annually as default rates normalized after unusually low pandemic-era levels. That is very different from saying the country is experiencing an unprecedented repossession collapse. But reporting supplied to SSC also points to estimates of roughly 2.2 million repossessions in 2025 and increasing delinquency across credit tiers, while highlighting the added problem of negative equity: borrowers can owe thousands more than the vehicle is worth when they need to sell or trade it. The important signal is not simply the number of tow trucks. It is the combination of high balances, expensive vehicles, long repayment periods and borrowers with less margin when something goes wrong.

Alicia’s story complicates an easy assumption about repossession. She did not describe purchasing the BMW while unemployed or simply deciding that she no longer wanted to make the payment. She bought the vehicle while working and then lost the income supporting the obligation. Her lender offered temporary relief, but deferrals do not erase debt; they rearrange when it must be paid. Eventually the mathematics of the loan collided with the mathematics of unemployment. For someone whose finances have deteriorated, selling the vehicle may also be difficult if its market value has fallen below the outstanding balance. That leaves borrowers choosing among a payment they cannot sustain, additional debt to exit the vehicle or the possibility that the lender eventually takes it back.

The seven-year car loan is therefore telling us something larger about the American consumer economy. A financial product designed to make a large purchase manageable is increasingly being used to bridge the gap between what vehicles cost and what households can comfortably pay. Extending that bridge to 84 months can solve the monthly-payment problem on the day of purchase, but it cannot guarantee seven years of uninterrupted income. Alicia went to bed worried about a car payment and woke up without the car. As more buyers need seven years just to get the monthly number within reach, the question is becoming less about whether Americans can afford the payment today and more about whether their finances can survive the length of the promise they are being asked to make.