The Loan Term Options for Used Cars in Ancaster
The Loan Term Options for Used Cars in Ancaster
Posted on July 29, 2021
Even though the loan is still being used to buy a car, there are slight differences between a used car loan and a new car loan. Fortunately, the loan term is not usually one of them. Our Ancaster car loans team outlines the loan term options for used cars and the pros and cons of shorter or longer loans.
Longer loans for used cars in Ancaster
The length of a loan is referred to as the term. It is usually measured in years but expressed in months as that’s also the number of payments you’ll make which makes it a useful measure.
loan term options for used cars can be between 24 and 84 months although it is possible to borrow for up to 96 months, which is 8 years.
We’re not sure we would recommend a loan that long but they are possible.
The pros of longer car loans in Ancaster
There are benefits to longer car loans. They include:
Lower monthly payments – The more time you have to pay something, the lower the amount you need to pay in instalments. It’s the same for car loans. Less money over more months can be a definite benefit to some borrowers.
Borrow more – If you’re treating yourself to a new car, you could afford a luxury model or more seats for the kids. Whatever type of car you’re after, borrowing more means more buying power.
The cons of longer car loans
There are also downsides to longer loans.
Higher cost over the term – Loan interest is accrued over the term of a loan so the longer that term, the more interest payments you’ll make. It may be cheaper monthly but it will cost more over the term.
Still paying for an older car – 6-7 years is a long time in automotive terms and you could be paying for a car that’s regarded as old by the time you’re done.
The pros of shorter car loans in Ancaster
The benefits of shorter loans include:
Get the loan paid fast – As long as you can afford the payments, a shorter loan means you’ll be free and clear much faster.
Pay less interest over the term – Depending on the rate you’re offered, you’ll pay a lot less interest over the term of a shorter loan than you will over a longer one.
The cons of shorter car loans
There is a downside to shorter loans though:
Higher cost per month – To repay the amount, you’ll need to pay more each month. Fine if you can afford it but it won’t be affordable for everyone.
As you can see, you can borrow for a used car between 24 and 84 months. The longer you borrow, the cheaper the monthly payment but the more expensive the loan.
Which way you go is entirely up to you but if you need help exploring your options further, contact one of our team.
Contact Unique Chrysler for help, advice and competitive Ancaster car finance and leasing.
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