With the price of a new vehicle climbing at an alarming rate, mostly due to the advanced technology that is offered on many vehicles on the market today, many consumers just can’t afford the increased prices for a car that used to cost them under $300 a month which is now reaching well over $500 to make the monthly payments. “ Yes,” the added features and benefits are great, but “no” the payments are not going to be something that is easily swallowed by very many car shoppers in today’s U. S. marketplace.
According to Reid Bigland, the head of Chrysler Group’s North America they will embrace longer loan terms to extend to not only the 84-month (7 year) timeframes but may even entertain the thought of 96-month (8-year) loan terms. On the other side of the argument, John Mendel, American Honda’s Sales Chief informed us that Honda will not be offering these extended contract terms. He called the plan “stupid, not just for us, but the industry” feeling the longer terms would dissuade car buyers from having much in the way of brand loyalty, especially when they are having to pay on a car that was new for eight years.
Eight years seems like a long time for a car to be under a loan contract. In that amount of time many will have put so many miles on a vehicle they won’t be able to enjoy the feeling of not having a car loan for a while. This may cause many car shoppers to be unable to save the down payment they want or feel they need in order to actually be able to afford another new car, maybe one that doesn’t have such a long payment term on it.