IRVINE, Calif. -- The latest study from Kelley Blue Book Marketing Research, New Vehicle Buyer Attitude Study on Financing, finds that six out of 10 people who are about to buy a new vehicle prefer a longer term loan with low monthly payments.

Industry estimates are that nearly 30 percent of new-vehicle shoppers currently owe more on their vehicles than they are worth. Additionally, the average term for a consumer vehicle loan grew from 48 months in 2000 to 63 months in 2004. These consumers who are "upside-down" in their current vehicle loan could put themselves further into financial jeopardy by extending their next new-vehicle loan past the average four-to-five year term, yet as a group they do not seem concerned about the ramifications.

"Consumers who purchased vehicles with little or no money down and for a six or seven year term, will find they owe more than the car is worth when seeking out their next new vehicle," said Jack R. Nerad, editorial director of Kelley Blue Book's kbb.com. "This negative equity leaves future buyers two unpalatable choices: either stay in their current vehicle longer or pile on still more debt."

Both choices have negative implications for carmakers. If this one-third of the market keeps their vehicles longer, new sales and growth potential will be stymied in what is already a sluggish new-vehicle market. And if consumers add more debt, carmakers can expect more defaults on vehicle loans and bankruptcies, costing carmakers' captive finance arms millions and limiting market growth.

"Just as an over-reliance on low-cost, subsidized leases came back to bite manufacturers and financial institutions in the 1990s, so too could the move to increasingly longer loan terms in this decade," Nerad said.