Long Loan Terms: The Illusion of Affordability
Walk into a dealership today, and you’ll hear this pitch: “We can get your payment under $500 a month.” It sounds manageable—but the trick is in the math. To make that payment look affordable, dealers stretch loans out to 72, even 84 months. That’s six to seven years of payments on a car that will likely lose value much faster than you can pay it off.
The Illusion
Lower Monthly Payments – A 72-month loan spreads the cost thin, making the payment look smaller.
Bigger Loan Approval – Dealers can sell more expensive cars by convincing buyers they can “afford” it monthly.
Immediate Gratification – Buyers focus on the monthly bill, not the total cost.
But here’s the reality: the car depreciates faster than the loan balance, keeping borrowers upside-down (owing more than the car is worth) for most of the loan term.
Why It’s a Problem
Trapped in Negative Equity
With long loans, it can take 4–5 years just to reach break-even. Sell or trade before then, and you’re carrying debt into your next car.
Paying More in Interest
A 72- or 84-month loan adds thousands in extra interest compared to a standard 48- or 60-month loan.
Delayed Financial Freedom
Instead of using money for savings, investments, or life goals, buyers are tied to a depreciating asset for most of a decade.
Why Gen Z Should Care
Gen Z buyers often face higher interest rates and lower credit limits. Combine that with long loan terms, and it’s a recipe for financial stress:
Higher APRs mean even more interest paid over 6–7 years.
Lifestyle changes (moving cities, switching jobs, remote work) can make them want to sell early—only to discover they can’t without taking a loss.
In many cases, they’ll trade in too soon and roll over debt, compounding the cycle.
The Better Way
Financial advisors recommend sticking to 48–60 months maximum, even if it means buying a cheaper car. For Gen Z, that often means:
Choosing a used car that fits the budget.
Avoiding “stretch loans” that look affordable monthly but cost far more long-term.
Exploring flexible models (like subscriptions) that don’t lock them in for nearly a decade.
The Bottom Line
Long loans aren’t about helping the buyer—they’re about moving cars off the lot. By focusing on the monthly payment instead of the true cost, dealerships keep people tied to debt for years.
At AristoCarWare, we believe there’s a smarter path: access without entrapment, flexibility without hidden costs, and mobility that moves you forward—not holds you back for 84 months.