How long should a car loan be effective?
Ideally, a car loan should only take place for 48 months or 4 years.
Most people are too eager to own a car that they will automatically settle for a long-term loan when the terms are outlined. Most salesmen do not give people who inquire the actual price of the car and, to encourage purchase, he will instead disclose the terms and the length of time that the loan has to be paid for.
Being upside down on a car purchase means that you are paying more than what the car is actually worth. This is a situation that people should not get themselves into. To avoid this, people need to learn two things: keep the loan terms up to 48 monthly only, and to put down at least 20 percent of the total price as down payment upon purchase.