Consumer Advocates Oppose 7 year Car Loans

The banking industry’s latest concept to lower monthly car payments is the 7 year loan.  Already, car dealerships are offerring 9 year car loans. Consumer advocates  urging people to steer clear. The biggest pitfall of the loan is that cars depreciate quickly. Car buyers a finding out that they can quickly find themselves in an upside down situtation – owing more than the car is worth.

Consumer advocates are shocked that the 7-year note is gaining popularity. “There are so many problems I don’t know where to begin,” said Todd Mark, a Consumer Advocate.  “Many times people take on a 7-year car loan and the car is already dead.”

At the current rate, a $15,000 car could cost more than $3,500 in interest payments. An less obvious problem is that most warranties expire after five years, leaving the owner responsible for major repairs for the final two years of the loan