A potential problem with having a long car loan is

Question

Quizplus · Accepted Answer

Having a long car loan increases the risk of negative equity, which occurs when the value of the car depreciates faster than the loan balance decreases. This means the borrower owes more on the car than it is worth, and it can be challenging to sell or trade-in the vehicle. Low monthly payments and low-interest rates may seem appealing, but they can lead to longer loan terms and a higher total cost of the car. Loan preapproval is not necessarily a problem, as it can save time and hassle when shopping for a car loan. Therefore, only choice C is the best answer.

A Potential Problem with Having a Long Car Loan Is