Auto loan term lengths continue to get longer, surpassing 68 months in 2025. Dealers are writing 84-month contracts more regularly and some are pushing 96 months.
The appeal is obvious: Longer terms often mean lower monthly payments for borrowers and easier approvals in the F&I office.
However, Brian Benstock, vice president and general manager of Paragon Honda and Paragon Acura in New York, told Daily Dealer Live host Sam D’Arc, that this shift toward extended-term financing is killing the most valuable thing dealerships can create: repeat customer frequency.
Driving the news: "I'd rather have multiple transactions in the same period of time," Benstock said. "In a seven- or eight-year period, we could potentially sell that customer three new cars and take in trades. That's five transactions."
Zoom in: Benstock's alternative is trade cycle management (i.e., getting customers back roughly every 30 months for a new vehicle.) Similar to the way Apple sells the iPhone.
"I've never replaced an iPhone that wasn't adequate," Benstock said. "They come out with something new, and the features—they've mastered the retention aspect of trade cycle management."
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He went on the explain: "We want to find more customers, we want to create more customers, we want to serve more customers, we want to keep more customers. Trade cycle management every 30 months is the only way I know of geometrically increasing your customer base."
Why it matters: The F&I-driven long-term finance model optimizes for profit per transaction. Benstock's model optimizes for transaction volume over time. One makes money now. The other builds a customer base that feeds all five profit centers (new, used, finance, parts, service) repeatedly.
What's next: Paragon's operating principle is find, serve, keep. And that means prioritizing customer frequency over maximizing what the F&I office can extract from a single transaction.
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