5 Year Loan On A Used Car

Say you buy a 3 year old used car and pay for it with a 72 month loan as most people do.

5 year loan on a used car. It is not wise to elect a 72 month used car loan. However there are some drawbacks and financial risks of taking on such long auto loans. The longest typical length on a used car loan is seven years or 84 months. Think twice about the car you want a 60 month loan is essentially a 5 year loan.

Once interest is factored in this depreciation may mean that you temporarily owe more on the loan than the car is worth. If you need more than a four year loan you are probably about to buy a car that is more expensive than you can really afford says managing editor mike sante of personal finance web site interest. With a longer loan term you build. A new car s value can decrease by 20 to 30 in the first year.

In general used car financing. There is the odd exception but the main reason for financing a car rather than paying cash for it is to spread the cost over several smaller payments instead of one big one. Also learn more about advantages of opting used cars loans. Determine if the used car you want is going to last that long without needing a lot of maintenance.

Four year loan terms will almost always have lower interest rates than five or six year car loans. Car loan options for older vehicles when you finance indirectly through a dealership the standards for purchasing a used vehicle typically top out at 10 years. That s not the only restriction however. As with so many things in life deciding how long my car loan should be boils down to a cost benefit analysis.

While the longer length may be safe for a new car a used car s value will depreciate too quickly to. Used car loans typically have higher interest rates than new car financing because there s more uncertainty as to the value of the car and lenders can demonstrate that used car borrowers default more frequently on their auto loans regardless of their credit. The long loan term on a used car will often lead to an upside down loan situation. Used car loan offers at bankbazaar lets you choose from a range of leading bank that provides loans to buy a pre owned car at a very low interest rate.