Reply to The 7-Year Car Loan: Watch Your Wallet

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Reply to "The 7-Year Car Loan: Watch Your Wallet"

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]These should be outlawed. Especially since it states how common it is to roll your previous car loan into your new one! 7 years is too long for a car loan since many cars don't make it that long or are totaled before. [/quote]

If the car is totaled, the insurance pays out. Every car should last 7 years if maintenance is done regularly.
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I agree, plus get gap insurance people. [/quote]

Even gap insurance won't cover the whole loan if you're rolling debt from your underwater loan into a new car purchase.  Gap insurance has limitations.

https://www.thebalance.com/gap-insurance-vs-loan-lease-payoff-527213

Loan/lease payoff generally only covers 25 percent of the ACV of your vehicle. For instance, if your vehicle has an ACV of $20,000, the maximum the loan/lease payoff coverage will pay is $5,000. Also, with loan/lease coverage your deductible usually applies. Both of these stipulations could leave you with an out of pocket expense in case of a total loss.
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