People who long for a car recently want to have an extended-term auto loan. It has become viral all over the world. It is now common for loans to last for 84 months or even longer. But is it to get an extended-term auto loan? We have some reasons why it might not be a too good idea to take out an auto loan of 84 months or even longer than that. This article will discuss these reasons.
Essential Things To Consider About Extended Term Auto Loan
Auto loan debt has increased by 81% during 2009, and according to Experian data, it has recently been the third-largest type of consumer debt. At the same time, the obligation of America’s outstanding auto loan balance is more than $1.3 trillion.
Rising vehicle prices are partially the cause of growth in auto loan debt. Experian data shows that the average loan for new passenger vehicles increases by $32,187 during the first quarter of 2019. Over 85% of new cars are being financed with a topping of $500 as average monthly payments.
The larger auto loans become, the more there is an increase in consumers who are stretching out their loan terms for them to be able to make a more manageable monthly payment. In Q1 2019, Experian said an increase in new loans with terms between 85 and 96 months for new passengers compared with Q1 2018.
Reasons Why Long Term Car Loan Isn’t Ideal
As the day passes, long-term car loans have become popular, but that isn’t enough reason for you to get one because there are disadvantages to long-term auto loans. These are:
Paying More Interest:
Smaller monthly payments are the meaning of an extended-term auto loan, but the payment is not the factor alone to consider. If your budget to get an auto loan, it will be nice if you check out the loan’s interest rate. Extended-term car loans have a higher interest rate, unlike short-term loans.
Even if you were fortunate to get a low-interest rate for your extended-term auto loan, after several years of making payments for like eight years above, you would realize that the interest rate will add up over time, unlike a short-term loan.
You Are Likely To Owe More Than The Worth Of Your Car
If payment of an extra $5000 for your new car doesn’t affect you, nonetheless, for you to be “upside-down” on your car loan is very risky. You will have negative equity when you start owing more on your loan than the vehicle’s worth.
If you think of selling the car or it got into an accident, the insurance company’s money or buyer’s money will not be enough to pay off your loan balance. Therefore, after you lose the car, you will still be making payments for your loan, including the price of the vehicle, if there is any need for replacement. So, do you think it’s worth the effort?
Trouble In Making Loan Payment:
As time passes, you can drastically change your financial situation over Eight years and above. Although it can be a positive change supposing you lose your job or an emergency medical bill hits you in the long run, what will you do?
Tying yourself down to a 7-8year auto loan can make other financial savings very difficult. Your credit score can be negatively affected, and your car can be repossessed when you have a downturn in your finances. Hence, thoroughly planning and thinking have to be followed through before you embark on an Extended term auto loan.
Signature Auto Group New York & Florida’s Trusted Car Leasing Company
As a company we learned a long time ago just how significant it is to have talented, loyal and motivated staff to serve our clients in every aspect; before, during and of course even after such an important vehicle purchase. Even though this will always be an ongoing process, this organization has been fortunate to have attracted and retain such extraordinary individuals at every single level in this company.
We are honored to serve all Signature Auto Group clients past, present and future clients in the major areas of the United States and around the rest of the world. Signature wants their customers to enjoy life to its fullest. We also have high standards that the staff agrees with and are committed to providing you with the service you deserve. The sales staff is extremely knowledgeable about our products and is there to get you the fantastic vehicle that you want and desire.
Brooklyn, NY’s Leading Car Leasing Dealer & Auto Leasing Broker in New York City
Come on in and check out our extensive inventory that includes all the latest makes and models of vehicles. It doesn’t matter whether you are wanting to purchase or lease; we have the perfect plan for you. And don’t forget to check out our specials, we are always having great lease specials on a lot of the new vehicles in stock.
SIGNATURE AUTO GROUP – BROOKLYN’S PREMIER AUTO LEASING COMPANY
For over two decades, Signature Auto Group has provided proficient lease services. We maintain high ratings on digital platforms such as Cars.com and DealerRater, praised for our excellent customer service and vehicle selection. Initially from the New York area, we have been accredited by both the BBB (Better Business Bureau) and the NYCC (New York Chamber of Commerce).
Now, Signature Auto Group is expanding our services across the New York City area, providing fantastic lease deals for Brooklyn and NYC Drivers. Choose from our wide range of vehicles and secure the necessary insurance and financing all in one place. Our centrally located office is found at 9265 4th Ave, Brooklyn, NY 11209.
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Reasons to Lease With Signature Auto Group
Signature Auto Group is recognized as the best car leasing company in Brooklyn, New York City, Queens, and surrounding areas. Here are just some of the reasons customers keep coming back to our services.
Endless Inventory of the Best Car Leases in New York City
While some dealers are having trouble filling up their lots, we have an abundance of choices. Thanks to Signature Auto Group being the price destination for you to trade in or sell your car in Brooklyn, we are able to maintain a large selection of vehicles.
If your preferred vehicle is not found on our lot, we are also a premier auto broker in Brooklyn. Simply let our team know what car you are looking for, and we’ll start the search. Not only will we find you a car, but we’ll also negotiate on your behalf for the best price. It does not matter if you are pursuing a car for lease or purchasing a new or used car. We will make sure that you’ll be able to find your perfect vehicle.
