Are 84 Month Car Loans A Good Idea In Glen Morris?

Are 84 Month Car Loans A Good Idea In Glen Morris?

Posted on April 26, 2021

Longer auto loans are steadily becoming the new way to buy cars. With prices increasing steadily, electric cars becoming more popular and trucks being as popular as ever, we are gradually spending more and more on our vehicles. That requires a larger auto loan and potentially, a longer one too. So, are 84 month car loans a good idea?

Our Glen Morris auto loan team outlines the pros and cons.

As always, rather than telling you what to do, we’ll outline the upsides and downsides of 84 month auto loans so you can make your own decision.

Pros of 84 month car loans in Glen Morris

There are definite upsides to an 84 month loan. They include:

Enables you to buy the latest models – You would typically only use an 84 month auto loan to borrow a larger amount while keeping payments affordable. That means being able to buy a more luxurious model, a prestige marque or a new electric.

Enjoy all the latest technology – New cars will feature the latest technology from heads-up displays to autonomous braking. Some of this technology will have trickled down to used cars but only new cars will have the latest tech.

Lower monthly payments – The other side to borrowing more is paying less each month. You could pay more per month on your loan but an 84 month auto loan means being able to borrow more with a sensible, and affordable, monthly payment.

Credit building potential – The longer you have an auto loan, the more months you’ll be building a positive payment history. If you’re rebuilding credit, this is a valuable opportunity to increase your score without any extra effort on your part.

Cons of 84 month car loans in Glen Morris

There are also definite downsides to 84 month auto loans. They include:

Longer period of negative equity – A longer auto loan means potentially being upside down for longer. That’s when the loan is for more than the car is currently worth thanks to depreciation. It doesn’t matter in the long term as everything evens out but some people just don’t like it.

More interest for more months – Auto loan interest is calculated over the term. The longer the term, the more interest payments you’ll make. While some longer auto loans offer lower rates, you’ll be paying that rate for longer so it may be more expensive over the term.

The warranty could expire before the loan – Not many cars some with a 7 year warranty except Kia. That means if you buy something else, you’ll be paying for a car long after the warranty expires. Again, it isn’t such a bad thing now cars are more reliable but it may leave you exposed to repair costs.

You could have the loan longer than the car – The average Canadian keeps their car for between 5-7 years. That means you could still be paying for a car long after you traded it in or sold it on. While that’s normal when you roll an old loan into a new one, it’s still money that needs to be paid off eventually.

Contact Unique Chrysler for help, advice and competitive Glen Morris car finance and leasing.

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