The Christian Science Monitor reports on the lengthening duration of auto loans…
“It’s crazy,” says Julie Bandy, editor in chief of Bankrate.com in North Palm Beach, Fla. Since cars lose value quickly, “you could end up upside down” on a long car loan – meaning the car could be worth less than the outstanding loan on it when you try to sell or trade it in.
Being upside down on an auto loan seems more and more likely considering the average age of a traded in auto is 5.8 years but 41% of new dealership initiated car loans created in Jan and Feb of 2008 are 72 to 77.9 months in length. A small percentage of loans (0.1%) are actually 9 years in length.
If you need that long to pay for your car, you need a different car.
