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What Is The Maximum Car Loan Length In Halton Hills?

What Is The Maximum Car Loan Length In Halton Hills?

As cars are becoming more expensive, Halton Hills auto loans are becoming longer. Unless you can afford to pay more each month, your only option to be able to borrow more without leaving yourself short is to extend the term. But what is the maximum car loan length?

 

We asked out Halton Hills auto loan team to explain.

 

Auto loan terms

 

When we use ‘term’ in finance, there are two possible meanings. One, a clause or condition within the product or two, the length of time the loan is taken out for.

 

In this blog post, we’re referring to that second meaning. So, the auto loan term is the number of months you’ll be paying it back.

 

We typically take out auto loans for a set number of years. As you pay monthly, those terms are referred to in months. So, 4 years is 48 months 6 years is 60 months and so on.

 

Is There A Maximum Car Loan Length For A Used Car?

 

There is not a maximum term. Each borrower or lender will decide the term depending on affordability.

 

There is a practical maximum of 96 months or 8 years. You would rarely find an auto loan for longer than this. Even this length is rare for a used car. You may find them for newer cars or expensive electric cars though.

 

Is there a ‘best’ length of auto loan?

 

There is no ‘best’ length of auto loan as much will depend on how much you’re borrowing and how affordable it is.

 

In practical terms, the best auto loan length is the shortest amount of time you could afford to repay the amount you’re borrowing. As interest is accumulated over time, the shorter that time is, the less interest you’ll pay if the rate remains the same.

 

Much will also depend on how long you plan on keeping the car. If you’re comfortable rolling one Halton Hills auto loan into another, it’s not an issue. If you want to get the loan over and done with so you can trade up, it is.

 

Again, it comes down to affordability.

 

Pros and cons of long used car loans

 

There are upsides and downsides to longer car loans.

 

Pros include:

 

Can borrow moreYou can buy a newer or more premium car while keeping the payments affordable.

 

Lower interest rates – Some lenders offer lower rates for longer loans as they will be making more over the term.

 

Cons include:

 

More expensive over the term – As you pay interest over the term, the longer that term, the more interest you’ll be paying even if it’s at a lower rate.

 

Still paying for an old car – It may be nearly new now but what about in 5 years’ time? You could be paying for what would be classed as an older car by that time.

 

As always, we recommend looking at your personal situation and deciding whether you can afford to borrow the amount you’re looking for. Then thinking about how long you’ll be keeping the car and whether you may not be better off just buying a cheaper one.

 

Whatever you decide we’ll be here, ready to help arrange that auto loan!

 

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

 

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Categories: Auto Loan

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