Lenders are giving huge incentives for customers to take on longer auto loans—six or seven years. At the same time, the average age of a car when traded in is less than 5.5 years. This means that people generally trade in their cars while still owing money. Another result of these longer loans is that people will owe more than their car is worth for a longer time:
As many as 40 percent of new cars buyers over the past six months have been “upside-down” on their trade-in, according to data from the Edmunds.com.
There are more good quotes in the article about people wanting—and taking—more than they can afford. Flexo’s advice: Buy what you can afford and keep it until it dies. If you take care of a car it can last two decades. The total cost of ownership can be incredibly low.
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