Currently most consumers are ready to get longer-term auto financing car loans (48, 60 or even 72 months). This usually means that it will take longer to get into an equity position with your vehicle. Of course even if you get into a negative-equity situation with your car loan, it won’t necessarily affect your overall credit score. However it could affect your purchasing power and it could impact the auto loan rate you get for your next loan.
Extended-term financing could be a good option for those consumers who like to keep vehicles for extended period. If you’re a consumer who likes to purchase a new vehicle on a fairly accelerated frequency, say 24 to 36 months, then that extended financing may mean that you end up with negative equity when you go in to trade your vehicle.
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