The average American marriage and the average car loan are about the same length. While six-year loans are common, longer-term loans are becoming more popular. One-quarter of Auto Loans in Elmwood Park fall between 73-84 months, and these loans are beginning to rival marriage where longevity is concerned.
Match the Loan to the Car
Before someone gets a car loan, they should consider how long they intend to keep the vehicle. The average vehicle ownership period is 93 months or about eight years. Keeping a car as long as a spouse may make sense, but when someone keeps a vehicle for three years or less, it can be easy to owe more than it’s worth when looking for a trade-in. By opting for a loan term that’s a little longer, people can avoid becoming “upside down” on the loan.
Consider the Vehicle’s Resale Value
The main drawback of extended-term car loans is trade-in or resale value. As a vehicle depreciates, the decline in value moves faster at some times than at others. It’s better to trade-in at the end of a relatively flat period than in a period of rapid decline. Every car retains value differently, but there are benchmarks to consider. Visit the website to learn more.
Once the five-year period passes, cars depreciate quicker and mileage continues to rise. The mileage itself doesn’t cause much depreciation, but it represents a mental block for many used car shoppers. If a person decides to trade in a car, they should do it before it depreciates too much, but after they’re sure that they won’t end up owing more than the car is worth.
If a person is committed to owning a vehicle for a long time and they think that longer-term Auto Loans Elmwood Park will work for their situation, it’s important for them to compare lenders and loan rates before making a decision. It’s also worth considering that interest rates usually increase proportionally to the loan term. Car buyers should look at becoming pre-approved with Leyden Credit Union so that they can go into the dealership with the information needed to tell a good loan from a bad one.
