Many consumers are having bad experiences with their car payments. Their payments are being known as “upside down” loans, because consumers are lengthening car loans to shorten the monthly payment. The loans stretch out for so long that when consumers trade the vehicle in for another they have to still pay for the trade in on top of the new car. Interest is then just killing the consumer. An auto information publishing company in Santa Monica, California says that “more than a quarter of buyers are upside down when they come in.”
The article suggests that the best strategy of purchasing a vehicle is “to try to match the term of the loan to the time you intend to keep the vehicle.” Another thing to keep in mind is to finish paying of the car loan before trading a vehicle in for a new one.