Should I finance a car for 72 months?

Question

I do plan to keep the car for over 7 years.

Answer 1

First off, if you are going to do this, you should have at LEAST some basic math skills. 12 divided into 72 = 6, not 7.

Secondly, if you are doing this on any car w/o a Toyota or Honda badge, you are screwing yourself completely. These two brands are the only ones that will have an equity break even point of about 2 - 3 years on that kind of note, as long as you aren't paying more than 12% interest. What I mean by 'equity break even point' is the point in time when you will owe aproximately what the car is worth.

If you are considering such a move on a domestic, even a Ford with 0% interest, you are going to screw yourself completely. Sure, you PLAN on keeping the car that long, however, I can tell you with, with reasonable accuracy, that in all liklihood, you won't. Everyone says they will keep it that long, but rarely does it happen. Sh.it happens in people's lives, circumstances change, and a lot of times, trading in what you are driving is needed to adopt to the new changes.

I sell cars, in fact, I sell a lot of cars. About 250-350/ month in a town of about 70k people. I can tell you that out of those deals, aproximately 30% do not trade. Sometimes it's because they are adding a car to their lineup and sometimes it's because someone else in the family will take over the car they are currently driving. However, on those other 70%, < 10% have a title to the vehicle they are trading in.

The odds are not in your favor. If you are going to finance a car for 72 mos, make sure it's a Honda or Toyota. Otherwise, if can't afford to put 20% down and finance for 48mos then you really can't afford the car.

Answer 2

I have owned a lot of Cars in the last twenty Five years, I never ever financed any of them, in fact I never ever bought a new car! The cars I owned were always between 6 and 14 years old LOL & I always managed to find some really nice "one retired owner very low miles, hardly drove it, always garaged" cars ! I never liked being tied in to a finance deal where I knew at the outset that the car was going to be worth far less than the financed price when I finished the payments.

So if you are going to finance a car, make sure that you do buy a car that is relatively "certain to still be a popular" make in the next 7 to 10 years. There are relatively few cars out there that fit that "tag" unless they are high end luxury makes, family cars such as French Renault and Peugeot are good buys and so are Japanese cars and of course small family Mercedes Benz, the A140 springs to mind.

Otherwise you d best just wait until you can at least pay 50% of the screen price cash and finance the balance on the shortest finance plan possible like 12 to 24 months! You might not feel like keeping it for 7 years the way the Car manufacturers are spewing out new car models every 6 months! ( seems like it anyway )

Answer 3

Then you had better pray that all goes according to your plan.

There are three troubles with such loans. One is the amount of interest that you will pay. If it's a 0% loan, that's all right, but with anything else you're going to pay a lot.

Second is that if there is any change in plan - whether you wreck the car, it turns out to be a lemon, or you circumstances change and it really doesn't meet your needs - and you are going to have a horrible time getting out of this. You'll find you owe more on the car than it's worth.

Third is just my rule of thumb - if the only way I can afford to buy something other than a house is a loan longer than three years, I can't really afford to buy it. Most of my cars I've bought with cash, but I can understand sometimes getting in a pinch where you have neither savings nor dependable transportation. Still, you can probably find something reliable that would be paid off in three years.

Answer 4

finance a car for as little time as possible. This gets the vehicle paid off and in most states, if you own the vehicle you only have to have liability insurance. You also need to finance at a payment that will keep up with the depreciation of the vehicle.
ex: my daughter was involved in an accident. her payments were below 200. when she wrecked it, the insurance company decided to total it because it would cost more for them to fix it than they determined it was worth. she owed more on the car than the payoff from the insurance company.

Answer 5

No. The way today's cars are made, it may
be a junk heep in seven years. I wouldn't
finance a car over 24 months.

Answer 6

If a manufacturer owned lender offers 0% financing for 72 months, I say go for it !!!!

You can pay it off earlier if you want to or send in more than your minimum payment & hence pay it off in less than 6 years but at ZERO interest .....why would you ?

especially if you intend to keep it over 7 years.

Answer 7

now the longer u finance the car.. the more interets you end up paying... but u can finance it for 72months.. and u can pay a lilttle extra every payment... that way u end up gettin the title early and make sure you bank lets you do that... otherwise there are always penalties envolved... be sure to check evry corner... Pay more in the beginging if you can... that way it cutz truly from your principle...