We also quantify the residual components of the trends in long-term borrowing and delinquency not attributable to identifiable factors. Second, our paper provides new evidence on the relationship between longer-term borrowing and auto-loan default risk. We find that observable factors associated with the choice of a long loan term usually indicate an increased risk of default. We also find that the increasing share of long-term loans and the rising frequency of auto-loan default are mostly attributable by nonspecific, year-of-origination (fixed) effects rather than factors observable from our data or observable to lenders. Moreover, although borrowers opting for long loan terms are more likely to default in most comparisons, the increasing share of borrowers selecting a long loan term between 2011 and 2016 did not materially contribute to the rise in default rates. Overall, our analysis highlights the role of unobserved borrower characteristics in driving the recent trends in long-term borrowing and default.