General opinions on 72 month auto loans?


Just joined a credit union, and to get the 60 month, you can only borrow up to 80% of the value of the car. If I were to go above that, the rate would be higher. The rate is 5%, but I get 1% off for being a new member. I doubt my down payment would cover the 20% not covered by the loan.

The 72 month loan is at 5.5% (4.5% with discount).

 

huh?

 

Fixed some unfortunate typos, but beyond that, what's hard to understand?

 

I got a 66 month loan. I'll most likely pay it off in 36.

 

My CU offered 72mo at 2.9%, but I took 60 instead. Just not worth the extra $ in interest.

-r

 

uh.... why didn't you take the 72 month term and make payments that would have paid it off in 60?

 

Because I don't like the idea of a 6 year loan, even if I pay it off early. I'll probably pay it off in 48 or less anyway, so I took 60 as an extra year buffer.

-r

 

That's a good rate for 60 months. the best I can do for 60 months is 3.5% I will probably pay it off in 48 or less

 

dude... that's like throwing free money away. just do what I do and pretend it's a 48... pocket the difference.

 

If you can pay it off in 36 months, why not just take out a 36 month loan? Generally speaking, lenders charge a higher interest rate for a longer term loan, so even if you pay your 66 month loan off in 36 months, you'll still pay more interest than you would with a regular 36 month loan.

 

Right. That's why I haven't understood most of this thread.

 

General speaking, I decided on a 48 month loan since "right now I'd like more cash in my pocket" hence the lower payments with longer term loans. I'm sure if you got the cash you can just pay it off without a loan My loan turned out to be 60 months because the guy who wrote up my loan rushed (it was on a Friday, paydaY) and screwed up the term. So, I ended up with a 60 month loan with the 48 month interest rate. I'll enjoy the cash for a while, until I decide to pay off later :P

 

One reason to take a longer term and pay off sooner is to allow a bit of buffer if something changes or some unexpected expenses arise. Your actual monthly commitment is lower. I've done that before - borrow on a 4 or 5 year term and then double up the payments.

(I think you meant sixty month term above, not six?) I've never been quoted different rates for different terms before. I guess I've just had pretty good luck negotiating favorable auto loan rates with my bankers.

 

same rate, 6 month or 66 month for me.

 

That's the exception, not the rule. Just about every kind of loan, from mortgages to car loans, has a higher interest rate for longer terms. Just one example: Wells Fargo's rate ranges from 3.99% to 5.39% as the term goes from 24 to 72 months.

 

if you are going to pay it off as 48... why not get a better rate for 48 month then?

 

I don't know if this was referring to my post or a previous user's post, but I explained myself that they DID give me a rate for 48 months, but accidentally wrote me up for a 60-month loan.

This is just different strokes for different folks. Some people like to have a fixed monthy payment, while others want to pay a little less in the beginning (to buy toys for the car )

 

Sorry... it was directed to Crazytree... pocket the difference comment.