People who long for a car recently want to have an extended-term auto loan. It has become viral all over the world. It is now common for loans to last for 84 months or even longer. But is it to get an extended-term auto loan? We have some reasons why it might not be a too good idea to take out an auto loan of 84 months or even longer than that. This article will discuss these reasons.
Essential Things To Consider About Extended Term Auto Loan
Auto loan debt has increased by 81% during 2009, and according to Experian data, it has recently been the third-largest type of consumer debt. At the same time, the obligation of America’s outstanding auto loan balance is more than $1.3 trillion.
Rising vehicle prices are partially the cause of growth in auto loan debt. Experian data shows that the average loan for new passenger vehicles increases by $32,187 during the first quarter of 2019. Over 85% of new cars are being financed with a topping of $500 as average monthly payments.
The larger auto loans become, the more there is an increase in consumers who are stretching out their loan terms for them to be able to make a more manageable monthly payment. In Q1 2019, Experian said an increase in new loans with terms between 85 and 96 months for new passengers compared with Q1 2018.
Reasons Why Long Term Car Loan Isn’t Ideal
As the day passes, long-term car loans have become popular, but that isn’t enough reason for you to get one because there are disadvantages to long-term auto loans. These are:
Paying More Interest:
Smaller monthly payments are the meaning of an extended-term auto loan, but the payment is not the factor alone to consider. If your budget to get an auto loan, it will be nice if you check out the loan’s interest rate. Extended-term car loans have a higher interest rate, unlike short-term loans.
Even if you were fortunate to get a low-interest rate for your extended-term auto loan, after several years of making payments for like eight years above, you would realize that the interest rate will add up over time, unlike a short-term loan.
You Are Likely To Owe More Than The Worth Of Your Car
If payment of an extra $5000 for your new car doesn’t affect you, nonetheless, for you to be “upside-down” on your car loan is very risky. You will have negative equity when you start owing more on your loan than the vehicle’s worth.
If you think of selling the car or it got into an accident, the insurance company’s money or buyer’s money will not be enough to pay off your loan balance. Therefore, after you lose the car, you will still be making payments for your loan, including the price of the vehicle, if there is any need for replacement. So, do you think it’s worth the effort?
Trouble In Making Loan Payment:
As time passes, you can drastically change your financial situation over Eight years and above. Although it can be a positive change supposing you lose your job or an emergency medical bill hits you in the long run, what will you do?
Tying yourself down to a 7-8year auto loan can make other financial savings very difficult. Your credit score can be negatively affected, and your car can be repossessed when you have a downturn in your finances. Hence, thoroughly planning and thinking have to be followed through before you embark on an Extended term auto loan.
Fort Lauderdale’s Most Trusted Car Leasing Company
If you’re looking for car leasing in Fort Lauderdale or the Miami area, Signature Auto Group Florida is the place to be. As a leading leasing broker, we help customers with early lease exits, lease swaps, new leases, and everything in between. With two decades of experience in the New York area collected, our company is confidently expanding its expertise to the South Florida region.
Becoming the go-to company for early lease exits in Miami and Fort Lauderdale is no easy task, but with our commitment to customer service led by a motivated staff, our entry is already favored by most. Standing by you every step of the way, our company strives to guide you in the right direction. Whether buying, leasing, or selling, a dedicated team member is here to attend and impress.
Along with our excellent staff, Signature Auto Group Florida offers a diverse array of services, separating itself from other car dealers in South Florida.
Car Leasing Florida
Serving areas from Aventura to Boca Raton, our reach is vast. As such, our inventory is built to serve all types of clients. With an impressive list of available cars for lease in Miami, we have a special vehicle for everyone.
Leasing a car is beneficial for many consumers. It provides a way to save on costs while evading any long-term commitments. Drivers remain open to the possibility of new vehicles, always able to keep their driveways fresh.
With our extensive industry knowledge and decades-long relationships, we’ve been able to build one of the most desirable inventories around. With most makes and models available, our lot is the only place you need to visit for your next lease.
Contact Signature Auto Group Florida Today!
Signature Auto Group is the best destination for car leasing in the Fort Lauderdale and Miami area. We offer an extensive inventory made up of all makes and models, along with an experienced staff dedicated to making your next visit pleasant and straightforward.
We aim to provide as many avenues of communication as possible, allowing you to interact with our team in a manner that is most comfortable to you. Regardless of the question, feel free to email us directly at email@example.com or use the built-in contact form. If you prefer a call instead, you can reach our team at (561) 709-2277.
You can also stop by our location to speak with us in person. We are located at 291 E Commercial Blvd, Fort Lauderdale, FL 33334.
Fort Lauderdale, Florida Car Leasing Return Center
If you have an car lease that is due to reach maturity, we at Signature Auto Group Florida can accept your lease return even if you did not lease it from us, all makes and models! Let us guide you through the process of turning in your current lease as well as provide all the information you need on leasing a new car.
If your lease is maturing soon, we suggest that a pre-inspection of your vehicle is conducted. This inspection will evaluate your vehicle’s condition using the Vehicle Condition Guidelines. After the inspection, we’ll provide you with a Vehicle Inspection Report, documenting your vehicle’s condition at that time. Save Big by returning your car with Signature Auto Group.
Fort Lauderdale, Florida Car Lease Transfer
A lease transfer works by allowing one driver to transfer their lease to another, who must qualify for credit approval with the finance company. A lease transfer is a simple process in which the name on a lease account is changed for the duration of the term. Other than the registered driver and the name on the lease, the remainder of the lease contract is unchanged. This includes mileage restrictions, wear-and-tear restrictions and the total length of the lease in months.
Fort Lauderdale Early Car Lease Buyout
Want to get out of your car lease early and into another car? Signature Auto Group Florida offers an early lease buyout program just for you. When you are leasing a vehicle, you can purchase your vehicle before the end of the lease contract. There are some instances when your car may be worth more on the market than your buyout price, and in this instance, you can actually make a profit!