I recently read an article or rant(?) from Suze Orman, who stated that no one should ever have a car loan over 36 months.
I guess it easier to be the case when dealers are giving them away as part of an endorsement deal, or if your employer was providing them to you. Then there is no problem with payments, so getting them under 36 months is very easy.
But with the cars that seem to be available at this time most have to be looking at a note for about $18K at 3.24% for 36 months you are looking at a payment of $525.37. The $18,000 note is based upon what I have been seeing with recent client purchases. Not many people are looking for bare basic models.
A $525.37 payment amount is steep especially for young car owners. Try finding a decent used auto for under $10K. I don’t think it can be done and have a vehicle that will last and is not a beater. Most people are looking for more modest payments that allow them to maintain some version of a normal lifestyle.
I took my son out a year ago and even the most basic of low end Fords all had sunroofs and other crap that pushed up the price. There were no bare basic models on the Ford, Toyota or Chevy lots. So really cheap starter cars are not what dealers are looking to carry or sell. No margin in them, so do not waste the time and money on them. That limits what you can chose from.
So, I have to completely disagree with the 36 month policy. As a policy written in stone it typically will not work, most people are living paycheck to paycheck and do not have enough to make a significant down payment.
But them that is why people hang onto cars for as long as they can. I typically hold onto them for 8 – 10 years.