When a $35,000 car costs $44,000

With high gasoline prices drawing so much attention lately, the often harsher overall cost of auto financing is being ignored by consumers who are stretching loans on new cars to as long as nine years.

Low monthly payments and no-money-down deals have long been used to shore up car sales in a slumping market. But auto buyers who opt for longer loan terms are more likely to wind up owing more on their car loans than their cars are worth. Car dealers and banks say people in this position have negative equity, but the popular expression is that they are “upside down.” Last year, about 29 percent of car buyers who traded in a vehicle to buy a new one owed more on their car loans than their cars were worth, compared with 20 percent five years earlier.

The problem has become more vexing as consumers increasingly view life’s expenses, from mobile-phone and cable-television bills to car payments and mortgages, in terms of monthly payments rather than total cost. Researchers say few car buyers, for example, know the actual full cost of their vehicles or stop to consider how much more expensive it is to take on a longer-term loan.

Extending the average car loan to five years from three years costs the buyer more than $2,000 in interest, yet loan terms continue to grow. Average maturity of a car loan today is about 70 months, up from 62 last year. Driving the average higher are loans that stretch to seven, eight and even nine years. Longer-term loans typically bring with them higher interest rates, adding to the total cost of financing.

But as autos continue to depreciate rapidly and the length of the average car loan flirts with the six-year mark, more motorists are not only paying more for their vehicles, but are often winding up trading them in before they are paid off.

The pattern among consumers to trade in their cars after about three years hasn’t changed for decades. But three-year car loans were the norm 30 years ago, when people began looking for a new car as soon as they paid off their current vehicle. Today, many people begin to think about new cars just halfway through the loan term.

The trend reflects the development of consumer habits in a wide range of financial practices from credit- and debit-card use to home buying and investing. People are increasingly likely to buy expensive goods and services even when they can’t comfortably afford them, and use long-term loans or credit cards to reduce the size of payments while lengthening the term.

“It’s the way people in the middle class live their lives,” says Julie Midkiff, a production director in Atlanta who three weeks ago bought a Honda CR-V using a five-year loan. “I hate the idea of having a loan for that long, but that’s what it took to fit my monthly budget.”