HIGH PRICES ON CARS AND RISING INTEREST RATES ARE BRINGING MONTHLY PAYMENTS TO A RECORD HIGH. HIGHER CAR PRICES AND PAYMENTS ARE MAKING IT ALMOST IMPOSSIBLE FOR THE AVERAGE JOE, LIKE YOU AND ME TO AFFORD TO BUY A NEW CAR. THE AVERAGE FINANCED AMOUNT FOR A NEW CAR REACHED $41,000, FOR JULY, AUGUST AND SEPTEMBER. THE AVERAGE MONTHLY PAYMENT IS NOW ABOVE $700.
IN GENERAL, MORE PEOPLE ARE STRETCHING OUT THEIR LOAN TERMS. THE AVERAGE IS 70 MONTHS. BUT SOME PEOPLE ARE OPTING FOR 84-MONTH LOANS. EXPERTS SAY THAT IF YOU ARE THE KIND OF PERSON THAT DRIVES A CAR UNTIL THE WHEELS FALL OFF, A LONGER TERM LOAN MIGHT BE FOR YOU, BUT, SHORTER TERM CAN LEAD TO NEGATIVE EQUITY ROLLED OVER INTO A NEW VEHICLE PAYMENT IS A NIGHT MARE FOR SHORTER TERM CAR OWNERS. BUT IF YOUR GOAL IS TO SAVE MONEY AND STAY OUT OF THE RED, YOU COULD SAVE THOUSANDS OF DOLLARS BY AGREEING TO A SHORTER LOAN AND LARGER MONTHLY PAYMENT IF THAT WORKS FOR YOUR FINANCES.
