Stop putting 10 year old cars on 72 month loans. Match the loan term to how long the vehicle can realistically be expected to function. See exactly when the car dies relative to when the loan matures, and what that means for the borrower.
Why this exists
The most common death spiral in subprime auto: borrower buys an aged vehicle on a long term loan. Car breaks down in year 3 or 4. Loan still has 3+ years left. Borrower owes more than the car is worth and the car does not run. They cannot trade out. They cannot refinance. They cannot afford the repair. So they stop paying. This tool prevents that by sizing the loan term to the vehicle, not the other way around.
TERM MATCHED
Loan matures before vehicle reaches end of useful life.
At loan maturity, the vehicle is still expected to be functional with manageable repair burden. Borrower has a working car when they finish paying.
Recommended max term
60 mo
Recommended action
Vehicle + dealLive recalculation
Vehicle profile
Reliability tier
Useful life: 220,000 miles or 16 years, whichever comes first.
Vehicle age8 yr
newusedaged20
Mileage110k
0100k200k280k
Wholesale value$9,500
$2K$10K$25K$40K
Annual usage13k mi
5k13k avg22k
Proposed loan
Amount financed$10,500
$2K$15K$45K
Term (months)72
12487284
APR22.0%
3%primesubprime29%
Vehicle health + loan timelineMonth by month
Healthy
Aging
End of life
Vehicle value
Loan balance
Loan maturity
Age at maturity
14 yr
vehicle when loan paid off
Miles at maturity
188k
projected odometer
Repair probability
78%
major repair during term
Expected repair cost
$3,100
over loan term
Underwater point
M14
loan exceeds value
Breakdown simulatorWhat if the car dies at month X?
Drag the slider to simulate the vehicle breaking down at any point during the loan. See whether the borrower can trade out, repair, or is stuck.
Breakdown at monthM36
Loan balance
$8,200
Vehicle value
$4,200
Trade-out gap
$4,000 underwater
Methodology. Vehicle useful life thresholds calibrated to industry reliability data (Consumer Reports, J.D. Power vehicle dependability, Manheim used vehicle longevity studies). Major repair probability uses a per year hazard rate that ramps from 5% (vehicle under 5 yr) to 60% (vehicle over 14 yr), modified by reliability tier. Vehicle depreciation uses straight line decay toward a $1,000 scrap floor over remaining useful life. Loan amortisation uses standard fully amortising payment formula. Underwater point is the first month where outstanding loan balance exceeds projected wholesale vehicle value. Recommended maximum term targets paying off the loan with at least 12 months of vehicle useful life remaining as buffer. For analytical and educational use only. Not credit advice. Use as a sanity check on collateral term matching alongside your existing underwriting process.