5 Reasons Say No Long Car Loans; Learn About It

Dec 30, 2023 By Triston Martin

Everyone wants to have their own car. Whether we work or study, we have to travel or move around. Buying a car is sometimes very difficult due to the higher rates of cars. Ultimately car loans become the only solution to fulfill the dream of having own car. There are two types of car loans smaller and longer. Smaller car loans are almost 60 months with lower interest rates. But now a day’s people are more interested in long-term car loans. But long term car loans are not beneficial due to certain reasons. Now we have to learn about the main 5 reasons say no long car loans. Long car loans have to be avoided to improve financial growth because long-term loans have various downsides. Long-term car loans consist of 84 months or longer. Long-term auto loans are more attractive to the buyer because of small installments, but in the long run, it results in huge amounts going out of hand due to higher interest rates.

With the passage of time, auto loans are increasing because prices of vehicles are increasing with the passage of time. As the loans are increasing largely with time, the buyer wants to reduce the monthly installment, resulting in a greater number of installments. Hence long-term loans are getting more popular among buyers.

Car loans of more than 60 months are not good enough for the buyer as it results in a higher amount that a buyer has to pay than the original value due to an increase in the interest rates and negative equity. Before applying for a long-term loan, a person must be aware of the loan he has to pay, interest, and actual fair market value of the car.

Higher Interest value

While taking a loan for our main car factor of focus is always a monthly payment; it is not the only factor to be focused on. Taking a car loan is something important enough to estimate the fair market value of the car at the end of the loan finished along with interest has been paid; because the long auto loans result in a higher interest rate as compared to the shorter auto loans. Although monthly installments are less but overall huge amount has been gone in terms of higher interest value at the end of the time.

Negative Equity

In the case of long-term loans, the money going into the auto loan is higher than the actual worth of the car. Hence it results in zero or negative equity, which means in case of an accident or selling of the car, we have nothing in our hands as compared to what we have put in the loan.

Higher repairing Cost

In the case of long-term auto loans, it takes almost 6 to 7 years to finish the loan. After 6 or 7 years, the car becomes exhausted. Definitely, it already has traveled a lot of mileages, resulting in the deterioration of tires, brakes, and other parts. That results in the larger and extra repairing cost along with the huge amount of interest that has been paid.

Higher Cost than the actual value

You really want to pay more than the actual value of the car; obviously not. But in the case of long auto loans, ultimately, you have to pay more than the actual worth of the car. It is not a good financial move for anyone because it results in a negative impact on your pocket overall.

Upside down condition of the buyer

Higher interest rates and the long period of time in the case of long-term auto loans result in an upside-down situation. Because vehicles get deteriorate with time; as a result, the value of automobiles gets down at the end, but the lender has to pay more than the actual value of the car.


All the 5 reasons say no long car loans results in the conclusion that it is not a good financial approach to go for the larger interest values results in the long term automobile loans. The negative equity and deterioration of the cars make it inappropriate to go for fewer monthly payments at larger interest rates.

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