Financing before looking at cars is always advices. How long should your autoloans be? Three-, five- and six-year loans are one of the most common opportunities accessible, and once upon a time, the latter option was popular. Studies for the automotive industry indicate the six year, or 72 month, loan is beginning to disappear though.
Problems with the 72 month automobile loan
According to Yahoo Answers, consumers should consider how long they plan to keep their car when they look at length of loan. 72 month automotive loans are probably not the right choice for since on average, individuals exchange cars after only 3 years. Having an upside down loan, which is where you owe more than your car’s value, can happen very easily. Unless you are 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 a little faster reminds Cars Direct.
Credit Unions can’t do it
Automotive News reports that the 72 month loan was a finance product credit unions have tried to offer. They promoted the loans aggressively in order to compete with zero-percent financing packages being offered by auto manufacturers. The Kelley Blue Book (KBB) suggests the 72 month loan is not popular anymore. Sixty-month auto loans are one of the most popular in America, followed by a near second-place tie between 48- and 36-month auto loans. The KBB says the 72 month auto loan isn’t really used anymore because of the recession. Right now, more people are putting larger down payments on their cars. Consumers have trade equity while dealers lose some money.
More info on this topic
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
