The thought of financing an automobile for over five years might have seemed crazy just lately, akin to the idea of a 40-year-plus home mortgage. But, apparently, not so much anymore.
As the regular lifespan of vehicles increases and home interest rates stay low, longer financing terms have grown to be more commonplace C to the point that auto loans of up to seven years not only are thinkable to consumers and lenders, alike, but usually occur with some frequency.
\”The biggest division of growth in auto loans is among those?with repayment periods?of?73 to 84 months, which?made up nearly 16 percent of?brand new?car financing in the second quarter [of 2012]. At seven years, these refinancing options last nearly as long because typical marriage ending in divorce, based on the U.S. Census,\” reports SmartMoney online.
The data may offer you pause, as it did me, once i considered my answer to a matter C \”Should You Take a 7-Year Car Loan?\” C posed within the column at SmartMoney.
My knee-jerk reaction to the issue was, \”No!\” But now I ponder about it myself. Although I still can\’t quite work out how we got to a place that your car loan lasts the better component of a decade and monthly payments could be as high (or higher) than a mortgage payment.
\”Twenty to 30 years ago, there is a culture of buying a whole new car every two to three years,\” said Tim Jackson, president and us president of the Colorado Automobile Dealers Association, in a very recent story in the Denver Post.? Nonetheless the quality has increased dramatically and quite a few ?can now be driven 250,000 to 300,000 miles without significant repairs.
He noted that Americans are driving the \”oldest quantity of cars on record\” at about 11 years. Suddenly, a 6- or 7-year car loan doesn\’t seem quite so crazy.
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