72 Month Car Loan Research Guide

Doing your research on a 72 month car loan before you choose a vehicle or make a commitment to a lender is a very important part of the buying process. There are a variety of considerations when choosing a car loan, especially one that extends for 6 years, and you want to have done good research about the loan, the lender and the vehicles before you make a commitment.

Find out all you can about car loans, especially 72-month car loans, before you choose one. Many people consider these loans because they will lower the monthly payment of a loan by lengthening the term. However, the payment is not the only consideration you should have when considering car loans.

Longer car loans carry higher interest rates than shorter loans, and sometimes the rate is much higher. This is because these loans have a higher risk for the lenders. They are extending their risk that you will default on a loan because there is a longer time period that you have to repay.

Also, you have a great risk of being "upside down" on your car purchase. Depreciation on cars, especially the new cars that often prompt people to get 72-month car loans, is quite rapid. Within 3 years, most cars depreciate to about ½ of their original value.

With a 72-month car loan, you have not paid anything close to ½ the amount of the car's price after 3 years because a high percentage of your payment is going towards interest, not principle. Therefore, if you tend to buy new cars every 2 or 3 years, a 6 year loan will quickly get you into a situation where you owe more than the car is worth. This is particularly true if you trade a vehicle in on a new car and they add the difference between the old car's value and what you owe onto the new loan. Those who keep cars for 8 to 10 years are the best candidates for long term loans.

If you are looking at a 72-month car loan, there is a good chance that you have some difficulty with income, that you have had trouble with car loans in the past, or that you are purchasing a very expensive car, but need to have the payments as low as possible because the car might be slightly more than you can afford.

Because of this, it is a good idea to research lenders carefully before you get a loan. Look online for customer comments and read financial publications to find out the stability and customer service reputation of the lenders.

See if they aggressively report payments that are barely late one time or if they only report repeated problems to credit bureaus. Make sure that they have a good customer service reputation.

A 72-month car loan is a long commitment to a car. Be sure to research the reliability of any vehicle you consider for that length of a loan. Also be certain that the model of vehicle you consider has a history of needing very few repairs and that it holds its resale value well.