GOOD OR BAD? Automakers Move Towards Using More 84 and 96 Month Loan Terms

Cars are becoming too damned expensive... it's like taking out a small mortgage now.

"loose credit terms" this is so sad, this is what got our economy in such a mess. Now we are also seeing 40 year mortgages too. If people cannot afford it they should NOT be able to purchase it. Personally, I wouldn't finance a car for more than 48 months.

I thought it was derivatives trading on housing and predatory home loans that helped bring down the economy...I didn't read anything about the lowering of qualifications to obtain an automotive loan.

@610looper I give you the derivatives trading on housing but not the "predatory lending". Most people in this country wants to afford what they cannot. Most of this people that lost their homes shouldn't have been allowed to purchase those homes in the first place, same goes with cars, boats, vacation homes and so on. But we in this country need to ensure everyone can afford the "American Dream" by making credit easier to obtain and that is how we tanked the economy. And by the looks of it, we are heading back on the same path.

I would; especially when nearly ALL of the auto companies offer "0% financing" or .9% financing. With those LOW interest rates, I'll use THEIR MONEY for 5 years. I pay my vehicles off accordingly but it doesn't bother me one bit if I have 5 years at "0% financing". You can most certainly find very low or NO interest rate available. They all do it at some point to move their models.

Say hello to negative equity, and a possible car bubble and collapse. I wouldn't be buy any car stocks now.

Ikr! Too many people a looking for extended loan periods to lower monthly vehicle costs - which (in some cases) means the consumer probably shouldn't purchase a vehicle with costs so much.

Negative equity is great...for the dealership as they roll that cost onto a new or used car purchase. AND THEN they sell your trade-in for a complete profit. Dealers - I'm sure - hate the guy that walks in ready to trade-in a car he owns (meaning he paid off the loan balance) b/c that lowers the new car transaction price & the dealer is essentially paying the agreed trade-in cost & will NEED to sell that trade-in to re-coup that "lose".

As automakers continue to update their lineups faster, these 7-, 8-, 9, or even 10-yr loans are getting ridiculously scarier. I know - if the consumer wants to sign for a 10-yr car loan that's his fault - but that means he's less-likely to fulfill those payment terms. That person will want something new(er) in half that time & will of course be drastically upside-down in their current loan but will just roll that balance onto the cost of another vehicle. This only promotes bad lending habits and increases lower financial credit worthiness.

Hey Dumpsty your second paragraph makes no sense. If i come in with a three year old car (and have even half a brain which i have been accused of) I'll get the trade price regardless of what I owe. The dealership won't give me less/more because I owe less/more. The car is worth what it is worth. I may then roll negative equity into the new car but that isn't a benefit to the dealer vs me owning my car free and clear. My trade is worth 10k whether I owe 14k or 3k. Dealers would rather see you come in without negative equity so that you can buy a car more often and you probably have better credit.

And so basically, FCA is willing to fcuk as many consumers in order to continue sales increases? Nice message to send....no...

That's insane. You will never own the car. When /if you ever pay it off it won't be worth a damn. If you can't afford it you should not get it. Sounds like a way to victimize the consumer to me.
T

I'd sign up for 120 months at 0% interest in a heartbeat.

I agree as I replied above similar to what you said. If they give you (say) 5 years at 0% (or 6 years), you are borrowing on their money. You're NOT paying any interest on that "loan" so makes no difference. Couple that many car company products are lasting LONGER. When I bought my 2007 Toyota Tacoma I took it out over 5 years. Toyota at the time gave 0% financing for that term. I paid the vehicle off in 2 years and 10 months simply by adding a little more every payment. I could have extended it out over the 5 years, knowing there was NO INTEREST on the loan (but I didn't).

I totally agree though IF you can't afford a $60,000 vehicle, then don't shop in that price range. Best to lower your "wishes" and move down to a $40K (??) car. But I have no problem using the finance company's 0% to crazy LOW rate offered over multiple years.

if its 0% you take that loan as long as possible. its costing you nothing !

Incorrect. You'll be out of warranty paying for repairs as well as the car payment. Any contract lease or buy that is longer than the warranty is suicide.

sounds like a disaster and the only one that wins is fiat as it unloads more of their garbage

I truly do not understand why people buy cars when leases are far cheaper over time. The sweetheart leases out there make buying stupid.

Speaking of stupid buying...

Any contract beyond 60 months is financial suicide for the customer and potentially for the lender as well.

The longer the loan the higher default rate as well.

We rarely write a 72 month contract. 84 and 96 are out of the question.

i personally agree with you darringer, but there are people out there who get cars that are past the warranty period anyway. some people keep their cars for 10-15 years so in this case it really isnt that bad.
if i could get a z06 with 0% financing for 96 months id probably do it as that would be a car id like to keep forever...
otherwise i lease all my cars, and have NEVER finished a lease in my entire life. on my 7th lease now since 2003.. usually about 18-24 months i put my stuff up on swapalease and get something else... next up, drop the ghibli and get either an m4 or m2 ( if i like how the m2 looks, performs, costs )

What's been your experience with the Ghibli?

the ghibli is pretty good. i like the design, exhaust note, overall very decent practical car.its a little on the big side for my taste, i really prefer coupes.( just cant afford a gran turismo )

I had a few issues at first ( sat radio antenna needed to be replaced for poor reception, rattle in the turbo waste gates, air conditioning didnt work, lining by the tires are flimsy and become loose driving through water, window switch in the rear didnt work)
never got stranded, but do feel quality in the bmw's ive had are much better. i think its good for the price and better than the competition but only for the name and only temporarily.
what happens when you start seeing them everywhere, which now you kind of do ? it will be nothing special and just another bmw, benz, audi, lexus..
i wanted it for something different, id probably get another one down the road, but not for my next car. the only way my next car would be another maserati is if they have a crazy lease deal on the alfieri which i know is not going to happen.