Direct answer
Yes, it is highly recommended because longer loan terms mean your car will likely depreciate faster than you can pay down the principal, leaving you ‘underwater’ if the car is totaled.
Financial analysis regarding vehicle depreciation curves and long-term financing risk factors. For additional information about the risks associated with long-term auto loans, see the Consumer Financial Protection Bureau‘s resources on vehicle financing.
What this means for you
Yes, it is highly recommended because longer loan terms mean your car will likely depreciate faster than you can pay down the principal, leaving you ‘underwater’ if the car is totaled.
FARMER STOCKMAN
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This page is informational and not a coverage guarantee or quote.
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