It is a good idea to try and get financing before looking at new cars. How long should your auto car loans be? Three-, five- and six-year loans are probably the most common possibilities 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.
Drawbacks to the six year auto loans for bad credit
Yahoo Answers suggests looking at how long you plan on keeping the car before deciding how long you need a loan to take you to pay off. Typically the turnaround rate for cars is about 3 years making a 72 month automobile loans ridiculous. An upside down loan, where more is owed than the vehicle is worth, is a distinct possibility here. The 72 month auto loan only makes sense if you’re keeping the car for at least five years. Cars Direct reminds us that if the loan has simple interest, you can still pay down the principal balance easily, effectively reducing the terms of the loan and the amount of interest you’ll pay.
Failure of credit unions
The 72-month auto loan was a flagship auto finance product for many credit unions, reports Automotive News. They promoted the loans aggressively in order to compete with zero-percent financing packages being offered by auto manufacturers. The Kelley Blue Book (KBB) shows us the 72 month auto loan is no longer receiving business. 36 month loans are the third most popular; 48 month loans are the second most popular; 60 month loans are the most popular in the U.S. now. The KBB says the 72 month auto loan isn’t used anymore because of the recession. More individuals use the thought of a larger down payment with a more affordable car. Dealers are losing money, but consumers are getting some great trade equity.
Read more on this topic here
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
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