Long-Term Used Car Loans: Is This Really Good For Consumers?

Yes, its a sign that the economy is recovering. Not only are car sales up, consumers are stretching out their loans to afford the monthly payments. However, its not just new-car loans, but used-car loans, too, as we learned from an article that appeared in a recent publication of Automotive News. Forty-eight percent of used-car buyers in the first three months of this year opted for payments that expand beyond 5 years, according to Experian Automotive. Eleven percent of consumers are opting for used- car loans that extend from 73 months to 84 months, during the first quarter of 2013. This is up by 23 percent from the same period in 2012.

Consumers Returning to Extended Car Loans, Again

 

With the economy improving and many folks still reeling from what some economist almost deemed as the Great Recession, consumers are back to stretching out the terms of their car loans, again. According to the Detroit News, so far this year, 30 percent of new-car loans are being expanded from 6 to 10 years. While doing this offers consumers the ability to drive away with more car than they would necessarily afford or allow payment sensitive customers to have lower monthly notes. There are warning signs buyers should heed, before getting worked into one of these 'car mortgages,' as we termed it a few years ago for an article we wrote for Black Enterprise magazine.