PriceProtect™
DriveShield™
GarageGuard™
Services
Insurance
Car Insurance
Compare Car Insurance with Jerry
Jerry’s Expert Advice
Car Insurance Estimates
Home & Renters Insurance
Renters Insurance
Repairs
Car Repair Estimates
Repair Estimates for Popular Services
Advice
Read Car Content
Browse Jerry Car Advice
Check Out Expert Car QnA
Learn About How We Create Content
Jerry Data & Research
Is it a bad idea to take out a car loan?
"I've read on the Internet that a car loan is a giant waste of money. My father says the same. Is this true?"
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“For some people, yes, a car loan is a terrible idea. The reason why it’s a waste of money for some people is that they don’t shop around, and they don’t understand how loan length and interest rates work.
Think about it. You’re buying a depreciating asset in a car, so if your interest rate is 10%, you’re going to lose tons of money on interest and depreciation over the life of the loan.
The only way to make it worth your while is to buy something within your financial means, make the term as short as possible (36 or 48 months is ideal), and pay the loan off as soon as you can.
By doing this, getting a car loan makes far more sense and you don’t waste money.”
View full answer
- Gregory R.
WHY YOU CAN TRUST JERRY
Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
Join 4M+ members in lowering their car insurance
You Might Also Be Interested
Read Advice From Car Experts At Jerry
What Others Are Asking
Browse More Content
Insurance in Your State
Easiest way to compare and buy car insurance
No long forms
No spam or unwanted phone calls
Quotes from top insurance companies