Financing before looking at cars is always advices. How long should your autoloans be? Even though 3, five, and six year loans are all accessible, six year loans tend to be one of the most popular. Studies for the automotive industry indicate the six year, or 72 month, loan is starting to disappear though.
The 72-month auto car loans has its drawbacks
When looking at a loan length, consider how long you plan to have the car, reports Yahoo Answers. 72 month automotive loans are probably not the right choice for since on average, people exchange cars after only 3 years. An upside down loan, where more is owed than the car is worth, is a distinct possibility here. The 72 month auto loan only makes sense if you are keeping the car for at least five years. You’ll pay much less interest if you pay down the principal a little faster reminds Cars Direct.
Failure of credit unions
Credit unions tried to use the 72 month auto loan once, Automotive News. They promoted the loans aggressively in order to compete with zero-percent financing packages being offered by auto manufacturers. 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 third 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 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 lose out on finance profit, when consumers are coming back with trade equity.
More details 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
