Seven-Year Car Loans: A Growing Trend with Serious Consequences
Update: 2025-11-11
Description
Seven-Year Car Loans: A Growing Trend with Significant Financial ImplicationsThe podcast episode delves into the rising trend of seven-year car loans, with 22% of new vehicle financing in Q3 2021 being for extended terms. The average new car buyer borrows $42,647 at 7% interest, leading to a $754 monthly payment. While longer loans reduce monthly payments, they significantly increase total interest paid. The risk of being underwater on the loan, where the cars value is less than the loan amount, is a major concern. Experts advise potential buyers to consider larger down payments and long-term affordability.
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