Long-term loans: Convenience or bad deal?(Finance & insurance)

Automotive News, May, 2008 by Gammon, Rosland B.

Byline: Rosland B. Gammon

As lenders and automakers offer longer loan terms to attract buyers with negative equity in their current vehicles, many in the industry say consumers should beware.

"When you're looking at putting consumers into 72-month or 84-month loans, are you doing them a favor or an injustice?'' asks Sergio Stiberman, CEO and founder of LeaseTrader.com, a Web site that helps vehicle owners get out of their lease contracts. "Manufacturers are pressed to sell cars, and the longer-term financing should do it.''

Average auto loan terms have risen from 57 months in January 2002 to 64 months in March, according to Edmunds.com data. But some banks, credit unions and captives such as Toyota Motor Credit and GMAC Financial Services...

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