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Discussion Starter #1
Some excerpts from the article:

Fiat Chrysler Automobiles NV’s Ram truck brand had the longest average loan terms in the industry last year, at 73 months, according to consumer credit tracker Experian. The automaker’s Jeep and Fiat lines also placed among the top five, along with Mitsubishi and General Motors Co.’s Chevrolet.“

“One factor contributing to Fiat Chrysler’s long loan terms is that it lacks a wholly owned U.S. finance unit, Zabritski said. Santander Consumer USA Holdings Inc., which operates Chrysler Capital, financed a minority of the automaker’s retail sales last year. Much of the remainder was handled by banks and credit unions that tend to offer longer loan terms, she said.

Longer terms increase the risk that lenders could get stuck with bigger losses on defaults. And consumers may later be squeezed out of the new-vehicle market if they owe more than their car is worth, Zabritski said.


Here’s a link to the entire article: America's Love for Trucks Means Long-Term Auto Loans Are Here to Stay
 

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Some excerpts from the article:

Fiat Chrysler Automobiles NV’s Ram truck brand had the longest average loan terms in the industry last year, at 73 months, according to consumer credit tracker Experian. The automaker’s Jeep and Fiat lines also placed among the top five, along with Mitsubishi and General Motors Co.’s Chevrolet.“

“One factor contributing to Fiat Chrysler’s long loan terms is that it lacks a wholly owned U.S. finance unit, Zabritski said. Santander Consumer USA Holdings Inc., which operates Chrysler Capital, financed a minority of the automaker’s retail sales last year. Much of the remainder was handled by banks and credit unions that tend to offer longer loan terms, she said.

Longer terms increase the risk that lenders could get stuck with bigger losses on defaults. And consumers may later be squeezed out of the new-vehicle market if they owe more than their car is worth, Zabritski said.


Here’s a link to the entire article: America's Love for Trucks Means Long-Term Auto Loans Are Here to Stay
Well, Silverado and Chevy too.
 

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When I buy, it will be a long loan, depending on the terms, because I will likely make more in investment growth than I will lose in APR borrowing.
But much depends on the terms.
 

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Ram and Jeep I can understand, they are expensive vehicles and should hold some value over time. But Fiat? They are already inexpensive and don’t hold value in the US. A long term loan on a Fiat is a recipe to be upside down for almost the entire loan.
 

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Personally, I was aiming for a 4 year loan. Just so happened I was offered 72 months interes free. My reasoning was I could withstand life changes better if my payment was smaller, and set the difference aside for a lump sum payoff, should things run smoothly.
We try to buy used with a 36 month note. Paying interest is like throwing money away, I try to do as little of that as possible
 

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Discussion Starter #6
Ram and Jeep I can understand, they are expensive vehicles and should hold some value over time. But Fiat? They are already inexpensive and don’t hold value in the US. A long term loan on a Fiat is a recipe to be upside down for almost the entire loan.
I know, huh. That’s like asking for a loan to buy chewing gum.
 

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In Canada FCA clients purchase at 96 months (8 years) almost exclusively. With rates at a staggering 4.49% sub-vented from FCA currently, the 96 month term is only further cemented in. When 0% over 84 months was available with a strong rebate, 84 months was being taken. Otherwise, 96 months has always been the number one choice.
 
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Discussion Starter #8
In Canada FCA clients purchase at 96 months (8 years) almost exclusively. With rates at a staggering 4.49% sub-vented from FCA currently, the 96 month term is only further cemented in. When 0% over 84 months was available with a strong rebate, 84 months was being taken. Otherwise, 96 months has always been the number one choice.
Geez

Do you have 30-year mortgages in Canada yet?
 
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With the lease deals at FCA unless you put on a lot of miles, why buy? If you do put on high miles you had best not go with a long term note, you will wear it out before it's paid for, then your really in trouble.
 

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Discussion Starter #12 (Edited)
With the lease deals at FCA unless you put on a lot of miles, why buy? If you do put on high miles you had best not go with a long term note, you will wear it out before it's paid for, then your really in trouble.
Some people keep their vehicles well past the typical 3-year lease. Others —Wrangler, Challenger, Ram pickup owners— like to modify.

I leased a vehicle once: I didn’t like the lack of control I had during the ownership of the vehicle, all the way to disposing of it.
 

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I got hosed on my Dart, it went from a 21k purchase price to about 13k I’m worth in about 6 months. Depreciation is terrible. I had a 72 month loan but luckily I put a lot down and sold the car once I wasn’t backwards.
 

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With the lease deals at FCA unless you put on a lot of miles, why buy? If you do put on high miles you had best not go with a long term note, you will wear it out before it's paid for, then your really in trouble.
I drive about 25,000-30,000 miles per year. With a 5 year note at the best interest rate I can find - typically 1.99-2.99%, loan payoff is below trade value in 18 months. At that point it's a matter of how long do I want to keep that before something new strikes my fancy or do I need tires, brakes, something major soon.
 

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I drive about 25,000-30,000 miles per year. With a 5 year note at the best interest rate I can find - typically 1.99-2.99%, loan payoff is below trade value in 18 months. At that point it's a matter of how long do I want to keep that before something new strikes my fancy or do I need tires, brakes, something major soon.
I was talking about a long term loan, but still 45k at 18 months old is getting pretty good money if your ahead of the game. Tires brakes still ok?
 

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I'm one I did and 84 month loan with my credit union on my 2018 Jeep Cherokee, but I also have basically perfect credit. But I also tend to keep my cars for a long time I keep my Dodge Caliber for 10 years, and I expect to keep the Jeep longer then that as it is a car that can grow with me well, I can easily fit adults in the back seat and if I do Find a Husband and have kids it is big enough to make a good family car. So I won't have to replace it any time soon, that and I don't tend to drive a lot of mile my Caliber only had 61k on it when I traded it in. (I just have been wanting and SUV for a long time, I like my Caliber it was a great car but I have been missing the higher driving position of an SUV since I got read of my 88 Plymouth Voyager in 2007 when I bought the Caliber. At the time I had been looking at the Dodge Nitro, which was built on the liberty platform, but I could not afford on that was as well equipped as the Caliber )at 19) But this time around I could afford a fully loaded Cherokee Limited (Tech Group, Luxury Interior Group, Active Drive II, Premium Sound System, 8.4" Uconnect with Nav, Sun Roof) I also negotiated a good sale price 38k including transport fee (was transported from another dealer 1,500) Tax (8.5%) and Title(couple 100), and I had 10 to pay as a down payment. (good considering the car in my market MSRPs at 42-43K equipped the way that I had it. and the loan term made the payment 387 a month so I can pay ahead and still have a healthy amount of money for other expenses since I take home $407 a week.
 
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Discussion Starter #19 (Edited)
Exactly. Why wouldn't I finance 72 months if I'm getting 2.9% or less?
Here are some:
  1. Because, based on people’s life stages, we are more likely to trade sooner than 72 months. And unless we have been paying over and above our monthly payments, we may be upside down on our loan —i.e., stuck with a type of vehicle that doesn’t suit our emerging life stage needs any more...e.g., like needing to trade in that Challenger because the missus is pregnant
  2. Because longer loans, by definition, mean greater financial risk. The longer we sit on a loan, the greater the risk in case we were to lose our job, (God forbid) get in an acciden, become ill, get divorced, etc.
  3. Because most vehicles are out of warranty at 36 months, and the chances of mechanical breakdowns increase exponentially with each passing year. Owing money on a car that needs major repairs is not fun.
  4. Because owing money for a longer period of time increases our opportunity costs. Depending on our individual financial situation, greater outstanding debt could reduce our ability to qualify for a mortgage, for a student loan, put more money towards retirement, etc.
 

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Discussion Starter #20
One thing just occured to me: The added practicality of CUVs allows those vehicles to carry their owners through many more life stages. For instance, a Jeep Cherokee serves perfectly fine to a college student getting to/from school, getting to that first job, and as a family vehicle for a young family.

This allows these buyers to stretch those loans because they can realistically expect that CUV to carry them across more life stages, and thus for a longer period of time, than say a Challenger or a Civic.

The catch, of course is, that CUV has to hold together over all those years.

Who on here believes a Jeep Cherokee or Compass will last 6 or 7 years without significant mechanical issues...?
 
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