That is a big part of the problem. IMO depreciation follows pretty much a five year amortization schedule. If you go any longer than that on a new car you're likely to end up upside down. At five years it's likely break even when you trade it in. Used cars are a little trickier, I wouldn't suggest more than four years on a lightly used very late model car, but the initial deprecation that those have already incurred sweetens the pot a little bit. Personally if there's no difference in interest rates, I'll sign up for a longer term and then schedule my payments based on a shorter term. That way if I get in a bind in the future I can back off payment amounts if need be. The answer to your question, from a value perspective, yes they are overpriced; however, if people are willing to pay it, then I don't blame the companies for charging it. I wish people wouldn't pay the exorbitant prices and keep auto loans five years or less. That way prices would have to adjust to keep up demand. I priced out a loaded F150 lariat diesel F150 the other night and it came out to $67K. It's a nice truck but not worth $67K.
