Chart of the Week: Auto Loan Terms

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Jan 06, 2020
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Budgeting, Behavioral Finance, Chart of the Week

This chart ties in well with today's Question of the Day which equates longer auto loan terms with higher interest costs for borrowers. 

 

Questions:

  • Which loan term has grown most dramatically in the last decade?
  • Which loan term has declined the most?
  • Why do you think that seven year loan terms have become so popular? 
  • Do you think that having a long-term car loan is a wise choice? Why or why not?

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Here's our question of the day about the increased cost of a longer term auto loan. Also, be sure to check out Shady Sam, a game where students see the relationship between lender profits and loan terms. 

 

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.