Don’t get duped into a longer car loan because you want a nicer car or one that is more expensive. This is typically why someone ends up with a long-term car loan, but at the end of the day, it is not the best financial move.

According to Experian, the typical amount loan amount has now risen above the $30,000 mark. The average used car loan is almost $20,000. More people are staying longer in debt with five to six-year car loans. Now, you may want a nicer car and are willing to take on a long-term loan. But some end up in this situation because of a persuasive car salesman. Before you enter the dealership, you should know what you can and cannot afford. If you are considering a long-term loan, then consider these cons before pulling the trigger.

You Will End Up Paying More for The Vehicle

Everyone gets caught up with the monthly payment instead of paying attention to how much they will pay overall. The longer you have the loan for, the more you will pay in interest. And typically, you won’t get a very good interest rate. This can be the difference of hundreds of dollars that you could use elsewhere if you had a short-term car loan.

How Negative Equity Can Affect You

Depending on the down payment, it will take a fair amount of time before the car is worth more than you owe. The danger of having negative equity in the car is that if something happens to the vehicle, like if it gets stolen or totaled, you may owe more than the car is worth. As noted by Consumer Reports, “insurance payouts are based on a car’s depreciated market value.” This means you will be stuck with the bill if you are in the early stages of the loan.

And negative equity situations don’t stop there. According to Forbes, many car dealers now are taking what you owe on the previous car and applying it to your next vehicle when you do a trade-in. For instance, say you owe $15,000 on your car but it’s only worth $10,000, then they will take that $5,000 and add it to your new car-loan balance. This can begin a cycle where you are never ahead of what you owe in comparison to the value of your vehicle.

Short-Term Loans for Used Cars

Typically, a used car already has a fair number of miles on it. It doesn’t really make sense taking out a long-term loan for a used car because it is going to age faster, which can mean more repair costs and less value at the end of the loan. This means that when you do go trade it in that it won’t be worth much and all you can do is sell it off for scrap.

Situations Where a Long-Term Loan Makes Sense

Like most financial advice, everything can change depending on the situation. If there is a special deal where your interest rate is close to 0%, then it might make sense to take out a long-term loan. Typically, though you need to have great credit. In that case, you can usually find an excellent rate. However, if this is not you, then you are probably better off saving more money for a larger down payment or hunting for a short-term loan.