| Many people are do not know that you can now get | | | | off and you run into the risk of owing more on the car |
| 72 month auto loans. Is that a good idea? | | | | than what it is worth. You also will generally pay a |
| 72 months. 6 years. It may seem like a long time, but | | | | higher interest rate that 60 months. However, if you do |
| for some people that are wanting a car and are trying | | | | intend to keep your vehicle for more than 6 years, and |
| to keep their budget in line this may work for them. A | | | | the $100 a month makes that big of a difference to |
| 6 year loan will typically have a higher rate than a 5 | | | | your monthly budget, then you can take the 72 month |
| year, but a 3 year has a lower rate than a 5. Yet it | | | | option. |
| seems that few actually take 3 year loans. Why is | | | | And while you may pay less money each month, |
| that? It comes down to the amount of affordability that | | | | more of each payment consists of interest rather than |
| surrounds the monthly payments. A 5 years loan will | | | | the principal. So while you're paying more interest each |
| cost loss every month in payments. And so in getting | | | | month, you are also paying back less of the loan |
| the 5 year loan that car owner convinces themselves | | | | principal. Because of this you run the chance that your |
| that they had afford a more expensive car. | | | | loan will become "upside down" -- you could end up |
| Should I consider 72 month auto loans? | | | | owing more on the vehicle than it's worth. |
| With the vehicle, it hinges on what what you are | | | | You can however contribute more than the minimum |
| considering doing with it. As in how long you plan on | | | | monthly amount that is due to reduce the finance |
| keeping it. Many people trade in their car after 3 years | | | | charges, as your situation changes - it always does |
| so a 72 month auto loan would not work for them and | | | | when we are talking about such a long period of time. |
| it would be costly to trade and well as being | | | | Doing this would mean that you are not restricted to |
| expensive as the loan would need to be refinanced. | | | | the full 72 months in payments. |
| Then again, if you are the type of person that wants | | | | Before considering whether to apply for 72 month |
| to keep the vehicles for 5 or more years then a 6 | | | | auto loans be sure to read the fine print, especially |
| years loan would be a more affordable consideration. | | | | about the fees and charges. You will need to weigh up |
| What are the downfalls? | | | | all the options before you decide if this is the best |
| The longer the loan is, then the longer it takes to pay it | | | | route for you. |