915 WALKERS LINE, Burlington, ON, L7N3V8, Canada
My Garage

84 Month Car Loans In Canada: Everything You Need To Know

84 Month Car Loans In Canada: Everything You Need To Know

Longer auto loans are becoming increasingly popular. Not only can you borrow more, you can also lower your monthly payments. This can make many more cars affordable to limited budgets and is one of the reasons we see so many of them.


But is an 84 car loan a good idea? Do they make financial sense? What’s the best auto loan term to get?


Our Halton Hills auto loan team explains.


84 month car loan in Halton Hills


An 84 month auto loan equates to 7 years. That’s a long time in car terms. A lot can change. New models, new technology and new safety equipment will all arrive within that time and completely change the driving landscape.


With automotive technology gathering pace all the time, 84 months can seem a very long time.


Yet, the average period of car ownership is between 5-7 years. Very few people can afford to buy a new car every couple of years, which is why they tend to lease them.


Car ownership is for longer.


84 month auto loans can be useful if:


You need to borrow more to finance a specific car – For example you want an electric car or need a truck for work. Longer auto loans mean more manageable monthly payments. As you will be very hard pressed to find cheaper vehicles that fit your needs, a longer auto loan may be your only option.


You need lower monthly payments – Whether you want lower payments to keep things affordable or are paying off other debts at the same time, lower monthly payments can be necessary.


An 84 month auto loan may not work for you if:


You won’t be keeping the car for long – If you’re the type of person who likes to change their car often, a longer auto loan may not work for you. It will mean regularly switching loans and resetting the front loaded interest clock which can means paying more interest.


You don’t like being upside down in an auto loan – If you don’t like the idea of negative equity, and we know a few people that don’t, longer loans are not for you. The value of the car will drop faster than the loan to begin with and will take longer to right itself. Not an issue if you plan to keep the car but isn’t something people are comfortable with.


You don’t like paying interest – Longer auto loans mean paying more interest over the term. The APR may be lower but you’ll be paying it for longer so will usually pay more interest over the term.


For example, a $20,000 auto loan over 5 years, 60 months at 4.5% interest means total interest of $2,371. The same loan over 84 months at the same rate means paying $3,352 over the term. That’s an extra $1,000 in interest!


Longer auto loans


As you can see, a longer auto loan in Halton Hills can work in some situations but not for others.


If you don’t like the idea of a longer term loan, consider putting more money down or buying a cheaper car. If you have to resort to an 84 month loan just so you can afford a car, perhaps you’re overspending!


Contact Unique Chrysler for help, advice and competitive Halton Hills car finance and leasing.


Be sure to connect with us on Facebook, Twitter, Instagram, or LinkedIn to stay up to date on our latest great articles!

Categories: Auto Loan

Tags: ,