New-car payments are dropping for all the wrong reasons.

The average monthly new-car payment decreased to $447 in October from $466 a year earlier,

Are consumers wising up and putting more money down? Nope. Are they choosing lower-priced models they can more easily afford? Nope.

So, why are car payments dropping? Easy. More and more consumers are stretching out their auto loans as far as they can go.

More than 38 percent of new-car shoppers in October opted for loans longer than five years, up from 24 percent of shoppers a year ago.

So as much as consumer experts advise people to limit auto loans to four years or less, it's clear a whole lot of folks aren't listening.

In fact, new-car buyers are opting for an average financing term of more than 62 months,  That could mean big trouble for your wallet a couple of years down the road.

Agreeing to more than 62 car payments will place a serious and continual strain on your monthly budget. And that's not your only worry.

An upside-down predicament
A low-down or no-down payment loan combined with a longer term is a sure way to get caught "upside down," owing more on a car than it's worth.

Because all new cars depreciate rapidly in their first two years, it's not unusual for someone to be "upside down" for the first couple of years in a five-year and six-year auto loan.

This is not a good place to be, especially if you decide to trade the car in for another one and have to roll the old car's remaining debt into a new loan. Yikes.

The best advice for people who are several thousand dollars "upside down" in an auto loan: Suck it up.

Continue to make your payments as long as you can, at the very least until the amount left on the loan matches the car's trade-in value.

"They need to ride it out," says Robert Holb, owner and general manager of Consumers Auto Consultants.

Holb gets morning-after calls from panicked new-car buyers all the time. The problem? They either paid too much for the car or signed on for financing terms they can't really afford or both.

Blame it on new-car euphoria. Lots of folks get so caught up in the excitement of buying a new car that they blow right by the details of the finance contract they're signing.

"Once a typical customer sits in a new car and decides it's going to be his, they kind of lose control in relation to long-term thinking," Holb says. "It's an impulse purchase."

Often, the reality of five years of $450 payments doesn't sink in until the next day.

"When folks call me the morning after, they're done," Holb says. "You can't just take the car back and leave it. You're committed to the contract you've signed."

If there are no prepayment penalties and you have the cash, you might want to increase your payments on a super-long loan. Paying ahead will cut your interest costs and help you build up equity more quickly.

Refinancing is also an option, especially if you're paying a sky-high interest rate on the loan.

Refinancing makes the most sense and yields the biggest savings when a simple-interest loan with no prepayment penalties is refinanced into a simple-interest loan with a lower rate.

Rethink your spending habits
Refinancing is also a good option for car owners who are strapped for cash and have several years of car payments ahead of them. Before you refinance, take a close look at your monthly budget. You may be able to make that car payment more manageable by cutting back on discretionary spending.

Be sure to check in with Bankrate's Frugal U. section for additional savings strategies and tips from readers.

Make things simple for yourself with your next car purchase by taking a long, hard look at your finances before you start shopping for a car.

The aim is to determine how much car you can realistically afford and stick to that figure no matter how tempting a more expensive vehicle may be.

Not sure how much car you can afford? A down payment calculator lets you see just how much a good-sized down payment helps to push down your monthly auto payments.

And this calculator lets you see just how much more interest you'll be socked with when you sign on for a super-long auto loan.

Not sure what kind of interest rate you qualify for? Find out. Shop around for financing at banks, credit unions and independent financing companies.

It's a good idea to have an auto loan in place before you set foot on an auto lot. That way if a dealer wants your financing business, he's going to have to beat the best rate you've found on your own. And he won't be able to talk you into signing on for a loan with a higher interest rate than you deserve.

Once you know how much money you're able to spend and what kind of financing you qualify for, you can concentrate on finding the best deal on an auto in your price range.

Compare prices, reliability studies and resale values. Much of the research can be done online by visiting sites such as NADAguides.com, Intellichoice, Autoweb.com, Edmund's Automobile Buyers Guide, AutoSite, Autopedia and Kelley Blue Book.

Don't overlook used cars. There are tons of late-model used cars available. Finding a previously owned dream car could save you thousands of dollars.

Promise yourself that you're never, ever going to sign a financing deal before you're good and ready. It doesn't matter how many hours you've already spent on an auto lot or how excited you feel about a particular car. You won't be talked into a hasty financing decision.

"Avoid the impulse purchase," Holb says. "Go home and think about what you're going to do."

The last thing you want to do is spend another five or six years regretting an auto decision.

Long after new-car euphoria ends, the payments remain.