A new trend in auto financing: car mortgages? Shoppers pay longer to get the car they want.

As a full-time real estate agent and married mother of two, 35-year-old Monica Johnson of Powder Springs, Georgia, needs to manage her time well. To spend her time driving to properties most efficiently, Johnson purchased a nicely equipped pre-owned 2007 Jeep Commander with a navigational system.

Chrysler Financial financed the vehicle for seven years at an interest rate of 9.5% (most extended term auto loans, also known as "car mortgages," don't qualify for low-interest finance rates), making Johnson's monthly car payment a manageable $552 on the $33,000 Jeep.

Johnson was ambivalent about the seven-year financing. "I am going to double up on my payments during those months I bring home a big commission check," she says. "I really have no intention of taking this long to pay off my Jeep. I just needed the cushion."

She's not alone. According to a study by the Consumer Bankers Association, 58% of new vehicle loans last year were for terms of six years or more, up by 3% from 2005. In used-vehicle loans, 48% were for six years or more, up from 40% for 2005.

What's driving consumers to opt for extended term auto loans? Michelle Singletary, syndicated personal finance columnist and host of her own show on TVOne, says, "People are doing it because they want more car than they can afford, and the only way to do that is to get a car payment longer than some people are married."

With a new vehicle costing an average of $29,400 in the fourth quarter of 2006, up 3% from the same period in 2005, it took 26.2 weeks of median family income to purchase a vehicle, according to Comerica Bank's Automobile Affordability Index. Moreover, last year more than 36% of consumers were upside down--owing more on the vehicle than it's actually worth at the time of trade-in--based on data provided by the Power Information Network. Consumers financing their vehicles for three years or less owed an average of $3,588 on their trade, while those financing their vehicles for eight years or more owed an average of $5,157 at the time of trade in 2006.

Experts agree that this trend of "car mortgages" can be reversed if consumers purchase a vehicle within their budget, put down a sizable down payment, pay off their trade, or consider leasing. For more information, log on to www.edmunds.com and www.carbuyingtips.com.

PROFILE OF THE AVERAGE EXTENDED-TERM CUSTOMER

* FICO (credit) score: 670 to 800

* Annual income: $70,000 to $75,000

* Years at present employer: 9

* Years of current credit history: 17

* Percentage that are homeowners: 83

* Average amount financed: $25,200

* Average annual percentage rate (APR): 9.5%

* Specialty prime customers average finance terms: 85 months

SOURCE: AMERICREDIT

[ANALYSIS OF LIGHT NEW VEHICLES FINANCED IN 2006

Average finance term: 64 months

Average interest rate: 7.48%

Average % of consumers upside down at time of trade: 36.35%

Average overall amount upside down at time of trade: $3,633

Average trade cycle: 5 years/3 months

SOURCE POWER INFORMATION NETWORK]