Car Loans – Long Terms 2

I’m Miriam Neff and I’m Valerie Neff Hogan with Wise Women Managing Money.

M Long car loans are a lenders dream.  A five-year loan on a used car sounds like a small monthly outlay.  But it will last for a long time.  Besides more money in the lenders pocket, that time frame may include job loss, health problems, and falling behind on payments. 

V Remember that every year of that long loan is a year where your payment remains the same, but the value of your car goes down.  At some point, you’ll want to offload that vehicle, but you’ll get less for it than the remainder of the loan, and still be obligated to pay that monthly fee.

M We can’t stress enough, defer buying, save and next time pay cash if you can.