Auto loans getting longer - WRBL

Auto loans getting longer

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As cars get more expensive car loans get longer and longer. Over the last decade the length of the average car loan has crept past five years and is now nearly five and a half years long, according to Edmunds.com.

Personal finance expert Gerri Detweiler of Credit.com says "I think our parents used to get two and three year car loans but now we're getting five, six, seven and even 8 year car loans. That's a long time to be tied to your car."

The longer your car loan the longer you are likely to be upside down on it. Meaning you owe more than the car is worth. "That means if your situation changes and you need to get rid of the car you're either going to have to write a big check or you roll it into a new car loan and that creates an even bigger payment next time," according to Detweiler.

That can turn into a vicious cycle. Detweiler warns if you are looking at locking into a six or seven year loan it might be smarter to scale back and look for a less expensive vehicle.

Detweiler says financing the car through the dealership isn't always the most cost effective option. "Shopping around for a car loan can save you a lot of money and that's something you want to do before you go into the car dealership. Credit unions offer great rates. There are on line lenders that offer low auto loan rates. There's really good deals to be had."

Here are a few more eight on your side tips. Check your credit score before you start car shopping. The better your score the better your interest rate. A larger down payment will also reduce the amount you owe and make it easier to qualify for a better loan rate.

It's also important to shop for a car loan in a focused period of time, typically two weeks or less, according to Detweiler. Because every time a lender checks your credit it is counted as a credit inquiry and it can cause your credit score to drop as a result.

Related: Millenials aren't driving

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