User uShare Login | Register
Login
Register

Along with posting photos, videos, and stories, your uShare account lets you post Classified Ads, recipes on What's For Dinner, and Announcements.


34° View Weather Current Conditions Sioux Falls Change Location
Set Weather Options

RADAR LOCATION

TEMPERATURE LOCATION

Share your Photos, Videos, and Stories on uShare! Click here to get started.

News

[0] My Saved Articles
Back to all news

Business

Find local businesses
on the KELO Pages!

 

Longer Car Loans More Common

September 19, 2012, 9:50 PM by Angela Kennecke

Longer Car Loans More Common
SIOUX FALLS, SD -

Cars are selling, thanks to low interest rates and special financing deals.  But a new study also shows that some consumers are stretching out their car payments for as long as seven years.

Jim Droppers likes to check out new cars in the showroom while he has his current vehicle, a Grand Cherokee, in for service.  He took out a five year loan for that vehicle and says he wouldn't want to stretch it any longer. 

"I think for the use of your money the better option would be if you had to go to that would be to go to a lease and just pay the value of the vehicle you are using versus taking the opportunity to have a lot of money tied up in a long tern loan," Droppers said.

Kevin Rost of Sioux Falls Ford says leasing can be a better option than a long loan of six to seven years.  He says his dealership doesn't even offer seven year loans because they're not fiscally sound for the consumer.

"A five year loan, you can pay down the value of the vehicle a lot quicker. The seven year loans, that's just a long time because the depreciation far outpaces the amount you're paying on it," Rost said.

For example, this F-150 truck would cost you about $550 a month on a five year loan with no money down. Stretch it to seven and it will run about $100 cheaper a month, but cost you more in interest in the life of the loan.  A three-year lease on the same vehicle is $300 a month.

"If you were to do a seven-year loan, you really can't come trade that back into us for about five to six years because the first two to three years; it's going to be tough. You're going to owe more on the car than it's worth," Rost said.

With deals like zero percent financing or conventional auto loans running between three and five percent interest, stretching out that car payment to get a more expensive vehicle just doesn't make good financial sense.

"They always say it's better to sleep on it when you find something you just can't live without," Droppers said.

Despite the costs, according to Edmunds.com, the average loan for a new car has grown to 65 months; more than five years.

Previous Story

Next Story


Comments





Sponsored
Find Local Businesses on KELO Pages!

View business

You may also like

First Look At Badlands Pawn

1/20/2015 3:29 PM

Dollar Loan Center owner Chuck Brennan is releasing the first images of the design for Badlands Pawn, Gold & Jewelry.

Full Story
Rock Stars To Celebrate Pawn Shop Ground Breaking

1/23/2015 11:15 AM

Bret Michaels and Lita Ford will perform at the District on Wednesday, Jan. 28 to celebrate the ground breaking of Badlands Pawn.

Full Story
Long John Silver's Building To Become Taco Shop

1/23/2015 4:00 PM

The former Long John Silver's on Minnesota Avenue is going to become a Mexican fast food restaurant.  

Full Story
Keg Chicken Back Open In SF

1/21/2015 9:12 PM

A fried chicken favorite is back in Sioux Falls.

Full Story
City Offers $500,000 For Workforce Ideas

1/21/2015 6:00 PM

The City announced today it's going to be taking applications for the grant money to be awarded to any business or organization that's looking...

Full Story | Watch


Events