A 97-Month Car Loan?! Really?
April 9, 2013 2 Comments
You may have read that some banks are offering consumers as much as a 97-month car loan. Really? The idea is to stretch out the terms long enough to reduce the monthly payment. But an eight-year financing deal screams “upside down’’ again and again. Let’s admit this is a subprime car loan at the least, and a scheme close to indentured servitude at best. Wait a minute — weren’t subprime housing loans the herald of our latest recession?
There is no doubt that today’s vehicles are engineering and manufacturing wonders – more durable than ever before. There is no doubt that doubling the terms could keep customers out of competitors’ showrooms for twice as long. But eight years?! You can age scotch and bourbon that long and improve the taste, but cars are like association presidents: they don’t necessarily age gracefully. Eight years will keep consumers away from significant safety improvements, technology upgrades and mileage gains. And when these go upside down, the value of used vehicles will drop faster than a cold beer on a hot day.
Do we learn nothing from history? Especially recent history?