Car loans stretch to 7 years or longer

0 Comments | USA TODAY, February, 2008 | by James R. Healey

Automakers and buyers are diving into extra-long auto loans, and they could drown from that plunge.

Toyota Motor Credit brought the loans to light when it acknowledged at a meeting last week it is making 84-month loans -- seven years -- to cut buyers' payments and boost sales. It's been making them since August.

GMAC, some credit unions and others also offer 84 months, and a sliver of auto loans, 0.1%, are even longer: 96 to nearly 102 months, says Power Information Network, a unit of consultant J.D. Power and Associates. About 82% are 60 to 77.9 months.

"Definitely bad," says Kevin Tynan, auto analyst at Argus Research. Easing buying with long loans "is bubble-inducing, and the bubble's bursting."

Long loans aren't always riskier for the...