Thompson Law Group, P.C.

Saving the car when auto loan terms are too long

New and used cars alike often cost tens of thousands of dollars, and the vast majority of people just do not have that kind of cash on hand. Auto loans make it easy for the average person in Pennsylvania to get a secure form of transportation. While it might be reassuring to know that a large number of consumers are paying back their loans just fine, someone who is struggling with repayment might be more interested in methods for saving the car.

There are expected to be approximately 17 million light-vehicle sales in 2020. Although this marks the fifth year of sales of 17 million units or more, it is also about a 2% decrease from 2019. One of the reasons behind that decrease could be the rising cost of vehicles. The typical transaction price for a vehicle is already over $35,000 with auto loan terms of around 68 or 69 months. As transaction prices push past $35,000, loan terms are also expected to lengthen.

In general, the longer the loan term, the more likely it is to result in default. Terms that extend past 84 months are especially risky. Unfortunately, those rising vehicle prices mean that even the most well-informed consumers in Pennsylvania will probably have to take out loans with terms longer than they are comfortable with.

Having access to a safe and reliable vehicle is necessary for getting to work, picking kids up from school and even bringing home groceries. When someone defaults on his or her loan and compromises ownership of that vehicle, saving the car is a top priority. One of the best options for doing so is by filing for bankruptcy, which automatically puts things like repossession and foreclosure on hold.

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