Clark County Credit Union (Las Vegas, NV)

Is 84-Month Car Financing in North Las Vegas a Good Idea?

Auto Loan Officer

A car can be an expensive purchase many consumers need to finance. Car loans have become longer over the years, growing from an average of less than 36 months in the early 1970s to 67 months today, according to Consumer Reports. Loans are now available for 84 months, and although the idea of lower monthly payments spread out over a longer period of time may sound appealing, Clark County Credit Union (CCCU) doesn't recommend them.

"CCCU believes consumer loans for motor vehicles are best capped at 72 months – not to limit the borrower, but to protect the borrower and the collateral," Roger Loftis, Members Auto general manager said.

These long-term loans aren't recommended for car financing in North Las Vegas for the following reasons:

You'll be tempted to buy more than you can afford

An 84-month car loan may prompt you to trade in or sell your used car while it's still perfectly fine so you can have a new car. It may also encourage you to buy a car beyond your means.

It costs you a lot of extra money

Although lower monthly payments on car financing in North Las Vegas may seem enticing, you'll be paying a great deal more by extending your loan to 84 months. In fact, this type of loan may cost you over $1,000 more than the thousands of dollars you'll already be paying if you buy an average-priced vehicle. You'll often be paying a higher interest rate than you would with a shorter loan term, so you end up paying more.

You'll be upside down on your loan

The longer the car loan, the more likely the loan will remain upside down – meaning you owe more on the car than is worth. If your car is totaled in an accident or if you sell it, you'll still owe the remaining balance of the loan, even though you won't receive that amount from the insurance company or a buyer. Remaining balances like this can sometimes be paid off by GAP coverage (Guaranteed Asset Protection), usually available from your credit union when you sign the loan.

You may be paying for repairs and a new car loan at the same time

By the time your car is six years old, it will have exceeded the manufacturer's warranty. A six-year-old car is likely to start needing repairs, so your wallet may be hit with these additional expenses while you're still having to pay your monthly auto loan payment.

Your car depreciates in value

Some types of debt are better than others. A college degree, for example, will probably help you earn more money. Buying a home means it may increase in value over time. However, a new car known as a depreciating asset. It loses value the moment you drive it off the lot and continues to lose value every year.

Contact CCCU, for car financing in North Las Vegas

To get started with your car finance in North Las Vegas, call CCCU at 702-228-2228. We offer low rates and flexible terms as well as a first-time car buyer program.

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