05/ 25/ 2006
There are so many decisions that come with buying a new car. Among the most important—how you'll pay for it. According to recent research from the Consumer Bankers Association, more than half of new car loans made by the group's member institutions were for five years or longer. It's the first time that the majority of new car loans were for longer than five years.
With proper maintenance, cars today last for more than 100,000 miles. With that in mind, consumers are comfortable with longer loans because they know there's less risk of getting stuck with an older car that isn't worth much. But before you buy a new ride for yourself or your business, remember that the longer the loan, the more interest you'll end up paying. Also, spreading out your payments means you'll be stuck with your car for longer. If you choose to lengthen your payoff program, make sure you plan to drive the car for the life of the loan.
