Buying a Car

Don't sign on for long loans. When I read the 'Money' article, I was surprised to read that the average car loan is the second highest average term on record. This made sense when it was explained, because a longer loan would mean you are spending less each month. What people look past is the cumulative interest you will continue to pay the lender for those extra months. People buy more expensive cars and stretch their loan so they believe they can afford it. For the average midsize car, the price is about $25,731. Over 48 months, interest paid would reach $2,399.38. When your loan is stretched to 72 months, you will be paying $3,625.77. While you may be paying a lower monthly rate when you take a longer loan, it will not work out in your benefit in the long run.