Should I Finance For 72 Months

Whether or not you should opt for a loan this long has more to do with your credit and the vehicle you choose. Also if I pay off the loan sooner than that which I should be able to do just cant right now as I am in school it wont cost much more at all.

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Just so you know I throughly plan on driving this thing into the ground.

Should i finance for 72 months. The standard auto loan is 60 months which is 5 years. While these loans may sound great on the surface there are many reasons why you should not finance a vehicle for that long. However the drawbacks often outweigh the benefits of a long-term loan.

On the other hand there are plenty of reasons not to. So I recently had a similar situation when we purchased my wifes suburban. In fact according to Experian 275 of buyers are now financing vehicles for 73 to 84 months.

If you purchased a used car with a 72-month loan term at the average financed price of 22201 your monthly payment would be. First off you are going to need a solid credit score in order to finance a vehicle for more than 48 months. On the 72 month loan you are going to pay an extra 466 in interest but you will have an extra 70 bucks in your pocket each month.

So the net effect of selecting a 72-month loan instead of a 60-month loan is that youll pay some 2000 more. If you choose financing thats longer than that it follows that youll have a long-term auto loan. They may only pay somewhere between 400 to 600 more over the life of the loan but save anywhere between 50 to 100 a month off their car payment.

So I just want to hear some arguments for and against 72 month loans. The last major concern is depreciation. Lets say for the sake of argument that you have to pay a little.

The difference in interest rate on a 60 or 72 month loan is minimal for these types of car buyers. The longer you want to finance a vehicle the higher your credit score must be. Get several loan quotes and compare all factors not just the monthly payment.

These days 72 month loans are not at all unheard of and some lenders are offering 84-96 month loans to customers with top credit scores. Generally the shorter the auto loan term the lower the interest rate youre offered. When financing with term lengths from 61 to 66 months the average amount financed was 29591 and the interest rate was 41 bringing the monthly payment to 512.

Youre Likely to Finance More Money The average loan amount for a six-year loan was 25300 compared to 20100 for a five-year loan the CFPB writes. But are dealerships really making more money with long-term auto loans. Yes you can finance a car for longer than 60 months.

This is because the longer loan term means there is a longer time period for which the lender is at risk for having loaned you the money. We were given the option of 0 financing for 72 months or 285 for 72 months with something like 7500 or 10000 off invoice I cant remember the exact deal So I ran the math and did the interest option as it saved me something like 6000. A 72 month used car loan should not be your first choice.

A 60 month auto loan will typically offer lower interest rates than a 72 month auto loan. You will pay a higher interest rate for this long-term loan than you would for a three- or five-year loan. Find the amortization table for a 45000 dollar auto loan for 72 months.

Another example of prime borrowers extending their term out to 72 months is to get a lower payment but still pay more towards the principle every month. There is only one benefit to financing a car for 72 monthslower monthly payments. A 72-month car loan is far from unheard of in todays auto financing climate.

So if after four years your car is worth 16000 but you still owe 18000 on it you would have to come up with another 2000 to trade in your car. But when a car buyer agrees to. Thats more than twice the interest youd pay with a 60-month loan.

Going from 60 months to 84 months on a 35000. You can find the best cash back. The average size of loans with terms of seven.

When you extend the loan to 72 or 84 months you also extend your break-even period. The average break-even point on a new car financed with a 60-month loan is 42 months. Some of the top lenders in the US include Chase Capital One Ally Bank Wells Fargo Bank of America Huntington TD Auto Carmax US Bank USAA FSB PNC and many of the auto companies have their own financing companies.

The benefit of taking out a 72-month loan is that it allows you to buy a nicer car while lowering your monthly payments. Experian reports the average loan term is now 68 months or about five and a half years and many auto finance companies are promoting 72-month loans and even 84-month loans. Its tempting to sign the dotted line on a 72-month or 84-month auto loan when you see the monthly payment plummet into a much more reasonable range.

While we still dont recommend long loan terms a 72-month zero-percent loan is not as potentially financially destructive as a long loan with a high interest rate. That means more money in your pocket instead of the lenders.

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