A short auto loan length may be 36 months to one borrower, and 12 months to another. A 60-month car loan was long considered conventional, but the average new-car buyer is creeping closer to 70 months. Some banks and credit unions even offer 96-month terms.
In this way, is a 48 month car loan good?
(1) You will generally pay less interest on a 36 or 48 month loan than you would on a 60 (assuming that we are not talking about 0% interest deals here). … (4) A longer period of time where you don’t have to make car payments.
Secondly, is a 72-month loan bad?
A 72–month car loan can make sense in some cases, but it typically only applies if you have good credit. When you have bad credit, a 72–month auto loan can sound appealing due to the lower monthly payment, but, in reality, you’re probably going to pay more than you bargained for.
Why is a 72 month car loan bad?
2. It sets you up for a negative equity cycle. Say you have to trade in the car before a 72–month loan is paid off. Even after giving you credit for the value of the trade-in, you could still owe, for example, $4,000.
Should I do 60 or 72 month car loan?
If you’ll make only the minimum required payments, then you should select the 60 month loan. If you have the self-discipline to pay off the loan faster, a 72 month loan will give you a lower interest rate and more flexibility.
What is a bad APR for a car?
Bad: 300-629. Fair: 630-689. Good: 690-719. Excellent: 720-850.
What is a reasonable monthly car payment?
Many financial experts recommend keeping total car costs below 15% to 20% of your take-home pay. … For example, if your monthly paycheck is $3,000, your car payment would be about $300 and you’d plan on spending another $150 on automotive expenses.
Is a 5 year auto loan bad?
With lower monthly payments, 5–year auto loans leave you more discretionary income to pay down other debt, save more, or just enjoy life! A 5–year loan is usually more affordable month to month. Drawback: These loans cost more overall. 5–year loans tend to have higher interest rates.
Why you should never take out a car loan?
You are paying unnecessary interest
When you finance a car, you are borrowing money from a bank to pay for the car. Obviously, the bank wants to be paid for the loan, just like with a mortgage or credit card. So they charge you interest on the amount you borrowed.
Is a 36 month car loan bad?
The best part about a short-term loan is that it is short term. A 36–month car loan will most likely keep you from being underwater on your auto loan. If you go into a short-term loan with zero money down, it is possible to owe more than the value of the vehicle, but it should not last very long.
What is the best length for a car loan?
42 Months
What is the catch with 0 percent financing?
The answer is that it usually isn’t the bank doing the lending but rather the automaker itself. The way an automaker can make money with a zero percent deal is simple: It still earns the same amount it would earn on any car deal, but now the money is earned over a longer span.
What is the best time of month to buy a car?
Shop late in the year and late in the month
The months of October, November and December are the best time of year to buy a car. Car dealerships have sales quotas, which typically break down into yearly, quarterly and monthly sales goals.
What is a good APR for a car loan?
What is a good APR for a car loan with my credit score and desired vehicle? If you have excellent credit (750 or higher), the average auto loan rates are 5.07% for a new car and 5.32% for a used car. If you have good credit (700-749), the average auto loan rates are 6.02% for a new car and 6.27% for a used car.