Why longer car loans should worry you

After 5 years, chances are you’ll owe more than the car is worth

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From the Summer 2014 issue of the magazine.

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Thanks to interest rates as low as 0%, Canadians are taking on longer car loans. In fact, it’s not unheard of to see payments stretched out to 96 months or eight years, says Car Help Canada’s Mohamed Bouchama. Even though car prices are rising, “people love the low monthly payments,” he says. The problem is when you go to trade in your car after four or five years and find out you owe more in payments than what the vehicle’s worth. “That’s called negative equity,” says Bouchama.

Why longer car loans should worry you

Why longer car loans should worry you

Source: J.D. Power & Associates

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