Long Car Loans Increasing

Car loans are getting longer and longer. It's a trend that took a sharp upturn in 2005 and went higher in 2006 and is even higher now.

The Consumer Bankers Association does a survey every year on Automobile Finance and their recently released findings show that the use of long vehicle loans is still rising sharply.

Long loans (more than 72 months long) now account for 17 percent of new vehicle loans. That number is up from only 9 percent last year and it was just 7 percent in 2005. To a degree this increase is probably driven by price increases. And a part of it may be the unwillingness of consumers to keep and drive their vehicles long enough to build up some equity before trading off an old vehicle for a newer one. Part of the problem that comes from that is the negative equity scam that some dishonest car dealers pull over on unsuspecting consumers.

Longer loans means that more Americans are adding to their debt load, and that is not only foolish but may end up putting them deeper into subprime lender debt at higher than average interest rates. That only increases the spiraling debt load. It's a vicious circle that may not end until consumers start tightening their belt and learn to resist Detroit's new car smell.

Of course, the problem with trying to keep a car long enough to get it paid off can sometimes be the fact that it's a lemon in the first place. Don't let a lemon car drive you down the road to a car dealer ripoff. We can help you fight back.

Burdge Law Office
Helping Consumers Fight Back Since 1978