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Consumer Group Says Car Loans Are Getting Longer and Costlier

A consumer group has said that car loans are getting a lot longer as well as more costly. Americans are getting much longer auto loans in order to take advantage of cheaper monthly payments. As a result, they are paying more to finance their cars and trucks. It is a phenomenon that has continued to grow a lot.

Key Takeaways:

  • Americans are getting longer auto loans to take advantage of cheaper monthly payments, but as a result, they are paying more to finance their cars and trucks.
  • Longer loan terms typically mean lower monthly payments but a higher overall cost to the borrower.
  • If a borrower gets a five-year loan to finance a $20,000 car purchase with a 5.0 percent interest rate, after three years the borrower will have paid $2190.27 in interest and still have a remaining balance of $8602.98.

“Americans are getting longer auto loans to take advantage of cheaper monthly payments, but as a result, they are paying more to finance their cars and trucks. I”

https://blog.caranddriver.com/consumer-group-says-car-loans-are-getting-longer-and-costlier/