The best rule-of-thumb we've seen is that monthly payments shouldn't exceed 8% of your gross monthly income. If that's $3,000, for example, then the payments should be no more than $240 a month.

Nor should you stretch your loan out over more than 48 months, or four years, to lower payments enough to fit that rule.

New cars and trucks start depreciating as soon as they're driven off the showroom floor. Stretching payments out for 60 months or more virtually guarantees buyers will be "upside-down" for much of the loan. That means they'll owe more than the vehicle is worth, making it difficult to sell or trade.

Yet extending payments over five, six or even seven years is how dealers persuade customers to spend -- and borrow -- record amounts for new cars and trucks.

According to the Federal Reserve the average length of an auto loan was 61.1 months in May and the average amount financed reached an all-time high of $27,163. At 7.8% annual interest, the average rate for such loans, the monthly payment would be a hefty $540 a month.