84 month auto loan
Lenders and finance companies have been approving long-term auto loans more often than ever before. According to a research by JD Power & Associates, more than 80% of auto loans are now 60 to 78 months long, and 8 year auto loans and longer are becoming increasingly popular. These include:While there are certain advantages to long term car loans — otherwise they wouldn’t be so popular — there are also pitfalls.
Smaller car payments are the #1 reason people opt for auto loans of 6 years or longer. Since the total amount to be repaid is spread out over a longer time period, your minimum monthly payment amount can be significantly reduced over a shorter-term auto loan. This can allow a buyer to get into the driver’s seat of a vehicle that they could not have otherwise afforded, or just to enjoy more affordable payments. Dealers like to be able to get their customers into the vehicle they desire, so if a longer-term auto loan makes the payments low enough for a buyer to afford, they may encourage a 72, 84, or even 96 month auto loan.
Who doesn’t want smaller monthly payments? Unfortunately, the longer loan term means greater vehicle depreciation. Most vehicles depreciate at a rate of about 15-20% each year. 3-4 years into a 5 year auto loan, the vehicle is typically worth a little more than the loan balance you have left to pay off. If you wanted to trade in the vehicle at that time, the profit you make could be rolled into a down payment. 3-4 years into a loan of 7+ years, however, you will have paid off much less of the loan balance. When a car has depreciated to a value of less than what’s still owed on the auto loan, that’s termed negative equity – or more colloquially referred to as an upside down auto loan. If you wanted to trade-in or sell the vehicle at this point, you would still owe money to your bank or lender.
Read more on Mycarlender.com
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Feb 02, 2011 by Kevin H | Posted in Buying & Selling
I'm turning 16 in two months and would like to buy a car when i turn 16. (i'll be getting my license) and was wondering if a 84 month auto loan would be a good idea. I would pay off the car when i turned 18, i have money in a trust fund that will pay off the car loan easily. so i would make like $120 payments a month until i was 18 and get my money and pay off the loan. what do you think? i know that my mom will have to sign a contract for me.
It doesn't work that way. You don't decide on the terms of how long you have to pay it off or how much your payment will be. Your Mom and the car have to qualify. Not to mention a nine thousand dollar car is going to cost more than $120 a month.
Apr 13, 2007 by Doogie | Posted in Credit
I have great credit and am looking for a low-interest yet longer-term auto loan (like 72-84 months). Thanks!
I just had a great experience with Capital One Auto Finance and would recommend them to anyone. http://www.online-auto-loan.org
May 20, 2007 by rza2k | Posted in Credit
Thats very very scary I got this when I wanted to get a newer car. I got a $14,000 credit, you might be able to get more as I have a bad credit score Here's the link, they have really good customer service as well http://tinyurl.com/3xnk2c