For many Americans, buying a new car is a reason to celebrate. People often choose to buy a car when a major milestone occurred such as graduation from school, a marriage, the birth of a child getting that promotion or reaching the retirement milestone. However, today’s new cars are more expensive than ever, causing more and more people to take out car loans that stretch past the traditional limit of 48-60 months. 72 month loans are pretty much standard practice with 84 and even 96 month loans becoming commonplace. While this may seem like a good idea when you’re looking at your monthly payment, this practice is leading Americans down a road of debt that is difficult to come back from,
The Hidden Costs of Car Ownership
With the average cost of a new car climbing over $37,000 in 2019, the average American family is finding it harder and harder to get into any car at all, much less their dream vehicle. This is where unscrupulous car dealers and banks come into the equation. Car dealers and now selling people cars and financing them for periods exceeding 60 months at an alarming rate. An example cited in a recent Wall Street Journal article described the plight of a young man who recently purchased a car understanding that he needed the payment to be $400 a month or less. Once the dealer got them into the finance office, they convinced him to add on high margin items like extended warranties and tire protection packs that added another $100 a month to his loan. In order to get close to the payment he needed he ended up financing his $27,000 car in a 72 month loan which will ultimately cost him $9,000 in finance charges and not be paid off until 3 years after the bumper to bumper coverage expires and long after any secondary warranties expire as well. This could potentially leave him paying thousands of dollars out of pocket to cover repair costs in addition to his $500 a month payment.
Fortunately, There’s help
If you are one of the unfortunate people who have found themselves underwater on a car that requires thousands of dollars in repairs, isn’t running at all or is now worthless because of unscrupulous car dealers tricking you into thinking you could afford a vehicle by spreading payments out over an extremely long term, you should consider speaking with one of the attorneys at Harmon and Gorove. Our attorneys have decades of experience helping good people free themselves from the bondage of debt and unscrupulous creditors. Contact our office today for a free consultation to learn about how bankruptcy can help you get your finances back in order and your life back on track.