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SPORTS Thursday 28 april 2022
Edmunds: A longer loan for your car? Bad idea

By RONALD MONTOYA 84-month auto loan. The
Edmunds monthly payment would
The traditional "20/4/10 drop to $563 with a 5.4%
rule" of car buying states interest rate. It seems like a
that you should make a massive improvement over
20% down payment, have 48 months — until you see
a loan no longer than four the finance charges: $7,990
years, and a total monthly over the life of the loan.
car budget that does not That's $6,445 more over the
exceed 10% of your take- 48-month loan and yet 34%
home pay. But the real- of new-car buyers are will-
ity is only 6% of new car ing, or forced, to make that
shoppers actually followed compromise.
that advice in March, ac- Now let's say you pur-
cording to Edmunds sales chased a lightly used car
data. The average loan with a 72-month loan term
term for a new or used car at the average financed
has steadily increased over price of $30,830. Your
the last decade and is now monthly payment would
about 70 months. be $559. It seems some-
The longer loan terms re- what reasonable from a
flect not only a trend of monthly payment perspec-
people seeking a way to A sold tag hangs from the inside rear-view mirror of a 2022 4Runner sports-utility vehicle as it sits in tive. However, interest rates
offset paying for costlier an empty storage lot at a Toyota dealership Sunday, Feb. 27, 2022, in Englewood, Colo. are much higher for used
trucks and SUVs but also Associated Press cars, and a rate of 9.2% is
inflated prices due to a fairly common. You'd be
nationwide vehicle short- to never-before-seen av- rot on the stick of a more The average loan amount paying $9,403 in finance
age. At today's car prices, erage payments and loan palatable monthly pay- for a new car in the first charges.
the old rule of thumb is not terms." ment, but it comes with a quarter of 2022 was $39,340. NEGATIVE EQUITY
only being ignored but is In March, 73.4% of fi- number of drawbacks. If we went with the recom- Many auto loans start in a
also unattainable for most nanced loans were above HIGHER INTEREST CHARGES mended 48-month term, it position of negative equity,
Americans. 60 months. The most com- The longer the term, the would have an average in- meaning you owe more on
"Shrunken inventory con- mon term was 72 months, more interest you will pay terest rate of 1.9% in March the loan than the vehicle
tinues to wreak havoc on followed closely by an on the loan, both in terms 2022. The finance charges is worth due to finance
both the new and used 84-month loan. The trend of the rate itself and the fi- over the life of the loan charges and the initial de-
vehicle markets," said Jes- is worse for used car loans. nance charges over time. would be $1,545, giving preciation hit of about 20%-
sica Caldwell, Edmunds' Just over 80% of used car Let's take a look at how the you a staggering monthly 25%. The time it takes you to
executive director of in- loan terms were over 60 numbers change on two payment of $852. It's easy build equity in the car will
sights. "Shoppers who can months, with 72 months the loans that are on opposite to see why someone would vary based on the vehicle's
actually get their hands on most common term. ends of the financial spec- opt for a longer loan. resale value, the loan term
a vehicle are committing A longer loan has the car- trum. Contrast that with an and down payment. q

Delta to begin paying flight attendants during boarding

By DAVID KOENIG flight." fect later this week.
AP Airlines Writer The rate of pay during Atlanta-based Delta has
Delta Air Lines, which is boarding will be 50% of successfully campaigned
facing another attempt regular wages. to defeat several attempts
to unionize its flight atten- The change comes as to organize its 20,000 flight
dants, will begin paying Delta plans to increase attendants. The Associa-
cabin crews during board- the boarding time for sin- tion of Flight Attendants —
ing, a first for a major U.S. gle-aisle or "narrow-body" which has been gearing
airline. planes from 35 minutes to up its latest organizing ef-
Across the airline industry 40 minutes, which the air- fort at Delta for more than
in the United States, hourly line expects will increase two years but has not yet
pay for flight attendants the percentage of flights amassed enough support
starts when all the passen- that depart on time. to force a vote — took
gers are seated and the Manion Taylor said that af- credit for the boarding pay.
plane's doors close. ter a test last fall, and get- "This new policy is the direct A passenger wears a face mask as she waits in a socially-dis-
Delta said the change will ting comments from flight result of our organizing," the tance area for a Delta Airlines flight, Wednesday, Feb. 3, 2021, at
start June 2 on all flights. attendants, she promised union said in a statement Hartsfield-Jackson International Airport in Atlanta.
In a memo to flight atten- not to impose the new posted on its website. "As Associated Press
dants, Delta's senior vice boarding times without we get closer to filing for
president of in-flight ser- providing additional pay our union vote, manage- pay their cabin crews for according to a regulatory
vice, Kristen Manion Taylor, for the cabin crews. ment is getting nervous." boarding time. filing. Delta's 13,000 pilots
said the new pay "further Delta said the new board- The union represents flight Unions represent between are represented by the
recognizes how important ing pay would be on top attendants at United, Alas- 82% and 86% of workers Air Line Pilots Association.
your role is on board to en- of 4% raises for flight atten- ka, Spirit and about a doz- at American, United and Flight attendants at Delta's
suring a welcoming, safe dants that it announced in en smaller airlines. Delta Southwest, but only 20% of Endeavor Air regional-flying
and on-time start to each March and which take ef- said none of those airlines Delta's 83,000 employees, subsidiary are unionized.q