Was just reading this article yesterday about how more people are opting for longer loan terms lately, especially with car loans. Apparently, it's because monthly payments are lower, which makes sense given how tight budgets are getting these days. But the kicker is, over time, they're actually paying way more in interest. Like, thousands more. I mean, I get it—lower payments sound great right now—but the idea of paying off a car for 7 or even 8 years seems kinda wild to me.
I remember when my cousin got his truck financed for something like 84 months. At first he was all happy about the low monthly payments, but after a few years he was upside-down on the loan (owed more than the truck was worth). Ended up being a real headache when he wanted to trade it in.
Curious what you guys think about this trend. Is it smarter to go for shorter terms and higher payments if you can swing it? Or does spreading it out make sense sometimes?
"Ended up being a real headache when he wanted to trade it in."
Yeah, I've seen that happen a lot—longer loans can really bite you if you're not careful. Had a similar situation myself a few years back; thought I was saving money monthly, but ended up upside-down too. Shorter terms sting a bit more upfront, but definitely worth it if you can manage. Good on you for thinking it through early... wish I'd done the same.
