Most people take out a loan when they buy a new car, and that’s fine. The problems arise when people take out loans that are too long. Clark discourages loans longer than four years. Five years maybe, but six or seven is not smart. The shocking news is that people are starting to take out 8-year loans! That means that you buy a car this year and stop paying for it in 2012. That’s ridiculous. When you take out these loans, the lender must charge a higher interest rate because the risk is greater. People start to dislike their car and want to sell it soon after. So then they try to sell it and end up “upside down” in their loan. That means that you’re tired of the car at a point when you owe a lot more than what’s it’s worth. One car dealer Clark recently talked to said about 80 percent people are upside down in their loans. The national average is about 40 percent. The smart thing to do is to buy an older model or a cheaper car. When you have a desire to buy a fancy set of wheels, step back from it.