A record 7 million Americans are 90 days or more behind on their auto loan payments, according to The Federal Reserve Bank’s latest quarterly report on U.S. household debt. Approximately 6.5% of all auto finance loans are 90-plus days past due.
WSB consumer expert, Clark Howard says, "the number of people delinquent on their loans is two and a half times what it was ten years ago." He says much of that has to do with people taking out ultra-long loans in order to afford the vehicle. "If you can't afford the payment on a 42-month loan then you can't afford the vehicle you're looking at," says Howard.
He recommends using a credit union to finance your car. Less than 1% of auto loans issued by credit unions are 90 days or more late, compared with 6.5% of loans issued by auto finance companies.
"This is brutal how many people are getting crushed by having the long, long, long loans", says Howard.
The first step is to pre-qualify for a loan, so you’ll know how much money the lender will give you and what your monthly payments will look like. Then you can figure out what your budget will allow you to afford.
A recent study found that one in five car buyers regret their decision within minutes — not days, weeks, months — but minutes. And once you drive that thing off the lot, there’s no more oops or never mind.
More information can be found here: https://clark.com/cars/guide-on-how-to-buy-a-car-biggest-mistake-to-avoid/