When you’re within the market for a new car, it is advisable to consider financing before you visit the dealership. How long should your auto loans be? Six year loans are the most popular although 3 and five are also accessible. However, as numerous automotive industry studies indicate, the six-year (72 month) automobile loans is going the way of the dinosaur.
The 72-month automotive loans has its drawbacks
When looking at a loan length, consider how long you plan to have the car, reports Yahoo Answers. Generally the turnaround rate for cars is about 3 years making a 72 month auto loan ridiculous. An upside down loan, where more is owed than the automobile is worth, is a distinct possibility here. Unless you’re willing to keep your car for 5 years or more, then you probably shouldn’t get a 72 month auto loan. You will pay much less interest if you pay down the principal just a little faster reminds Cars Direct.
Credit Unions won’t work
Credit unions tried to use the 72 month auto loan once, Automotive News. Auto manufacturers offered zero percent financing packages which was when they tried harder to get these loans out. But data from Kelley Blue Book (KBB) and other sources suggests the 72-month auto loan has fallen in consumer popularity. 36 month loans are the 3rd most popular; 48 month loans are the second most popular; 60 month loans are one of the most popular in the U.S. now. The recession has affected loans so much that the KBB suggests it is the reason 72 month loans are hardly used anymore. Right now, more individuals are putting larger down payments on their cars. Dealers are losing money, but consumers are getting some great trade equity.
Citations
Automotive News
autonews.com/article/20100723/BLOG14/100729946/-1
Cars Direct
carsdirect.com/auto-loans/seventy-two-month-used-car-loan-good-idea
Yahoo Answers
answers.yahoo.com/question/index?qid=20080317121437AAGnaNj
