Auto buyers commit to longer vehicle loans
Posted on Monday, March 9, 2015 at 8:09:52 AM
Overall, February was a fairly strong month for vehicle sales. According to Fiat Chrysler, sales for its popular Chrysler, Jeep and Ram brands all had year-over-year improvements.
In fact, nine of Fiat Chrysler's vehicles had record months in February, including the Jeep Patriot and the Jeep Cherokee.
"Even with tougher year-over-year sales comparisons in 2015, our vehicle lineup continues to produce record sales results," explained Reid Bigland, head of U.S. sales for Fiat Chrysler.
The company wasn't alone, either. Many different manufacturers had quality months in February, helped along by a number of factors. For example, USA Today reported that buyers are turning to longer auto financing terms. Today, it isn't uncommon to see 72-month to 96-month loan terms.
This trend has helped buyers drive off in more expensive vehicles than typically within their budget. With lower monthly payments, buyers have the option to get behind the wheel sooner than with shorter-term loans.
However, this can also prove risky. Longer loans naturally take more time to pay off, but they can also mean buyers owe more on their vehicle than it is worth. This comes into play should they have an accident or want to trade it in for a newer model.