The real cost of extended-length car loans
FOX 5 Atlanta
ATLANTA – There is a new car loan trend toward something called an extended-length loan. But be careful, because they can be a real financial pitfall.
I remember when car loans creeped up to five years and people shook their heads and said, “That’s a really bad idea.” Well, now we are seeing 84-month loans. That is seven years. Yes, paying off a car loan for seven years.
But it gets worse. I talked with the VP of Consumer Lending at Delta Community Credit Union who says the second you drive that new car off of the lot it depreciates as much as 11 percent. Now add the cost of a seven-year loan. If something happens to the car before you pay it off, you can be in a heap of trouble.
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