Yet more and more Americans are biting off more than they can chew financially, and car contracts are stretching, in some cases seven years or more. J.D. Power & Associates said the 41 percent of new car loans had contract terms of 72-77.9 months in January and February of this year, an increase of 10 percent over the same period four years ago. Tom Libby, senior director of industry analysis at J.D. Power said the average age of cars being traded in at dealerships is 5.8 years.
Longer terms can put many consumers upside-down on their loans, a situation where value of the car has depreciated below the amount of the loan, making it difficult, expensive, or even impossible to trade-in or refinance.
According to Price, experts attributed the lengthening terms to several factors, including “rising car prices” and people wanting to live above their means.
» Economic Slow Down Isn't a Recession...Yet from BusinessKnowMoreMedia
I stumbled across an informative post on MSNBC.com business page. Most "answer your questions" columns are short on the info, providing only a cursory read. This time though, MSNBC Senior Editor John W. Schoen wrote a full length article in... [Read More]
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