If you fall into the majority of Americans who need to borrow money in order to buy a vehicle, there are a couple things you should know. Certain lenders may offer you a loan that extends to 72 or 84 months. These types of loans are rarely a good idea. Here are some of the reasons you should avoid them.

Negative Equity

One of the biggest downsides to a lengthy loan is the fact that you’ll likely be paying off the same car for much longer than the agreed upon time. Phillip Reed, a writer for nerdwallet.com states, “Say you have to trade in the car before a 72-month loan is paid off. Even after giving you credit for the value of the trade-in, you could still owe, for example, $4,000. “A dealer will find a way to bury that four grand in the next loan,” Weintraub says. “And then that money could even be rolled into the next loan after that.” Each time, the loan gets larger and your debt increases.” Although it might not seem like it, you will save money in the long run with a higher payment each month.

Loan Application

Underwater

Being underwater on a vehicle means that from day one, you already owe more for the car than it’s worth. That’s never a good position to be in! It’s worth it to be able to qualify for financing on a shorter time table. You can do this by either purchasing a less expensive vehicle or by increasing your down payment. Ideally, you would choose a car where you can qualify for the shortest loan length. This is the easiest way to avoid being financially overwhelmed.

Repair Costs

Over extending yourself financially in order to purchase a vehicle is a train wreck waiting to happen. The reality is, repair and general maintenance costs are guaranteed. According to Reed, “A 6- or 7-year-old car will likely have over 75,000 miles on it. A car this old will definitely need tires, brakes and other expensive maintenance — let alone unexpected repairs.” The average monthly car payment is around $500-$600. Can you afford to pay that as well as any costly repairs that may come up? If the answer is no, reconsider your budget.

Jumps in Interest

Did you know you end up paying higher interest rates when you agree to a loan timeline longer than 60 months? A consumer will qualify for one interest rate when financing from 61-66 months and another, higher interest rate when financing from 67-72 months. The average jump in interest is around 2.5% resulting in about a $44 increase in payments monthly. It may not seem like much, but $44 multiplied by 72 adds up quickly.

When deciding on a vehicle to purchase, make sure you can afford it. You want to own your car, not the other way around. Opt for the shortest loan length to ensure this is a purchase you can enjoy without stress.