How Long Should You Finance a Car?
Table of Contents
Key Takeaways
- Financing a vehicle is a personal choice; only you know what’s best for your lifestyle.
- A longer financing term can lower your monthly payments
- A shorter financing term may be a better option if you plan to upgrade in a few years
- Taking advantage of financing promotions can help you save more
How to Choose a Financing Term: How Long Should You Finance For?
If you are looking to finance a vehicle for the first time you might feel a bit uncertain about the available loan terms. Depending on your personal circumstances, you might want to consider either a shorter- or longer-term loan. But how can you know which is the right option for you?
At Ontario Chrysler, we are the Ram, Chrysler, Dodge, and Jeep dealership Toronto residents turn to when looking for the best selection of the most in-demand vehicles. We know that choosing a financing option can feel like a tough call. In this post, we simplify choosing the best financing option for you and offer insight into the benefits and drawbacks of different term lengths.
If you are looking for the lowest possible monthly payment and plan to keep your vehicle for a long time, a longer-term loan can help you have more room in your monthly budget. If, on the other hand, you prefer to pay less interest and own your vehicle outright more quickly, shorter-term loans are ideal.
Financing terms are generally available from as low as 24 months to as high as 96 months. Knowing which is right for you generally comes down to personal preferences. However, taking advantage of promotional interest rates can be a great way to save regardless of the term length.
Quotes From the Experts
Ayman MakawyAssistant New Car Manager
Pros and Cons of a Shorter Financing Term
| Pros | Cons |
|---|---|
| You will pay less interest over the course of your loan | Your monthly payments will be higher |
| Your loan will be paid off faster | A higher payment can leave you feeling like your budget is tight |
| You will be less likely to be underwater on your car loan | Replace with Con 3 |
| You might want to upgrade your vehicle well before you have paid it off |
Frequently Asked Questions
How Can I Get the Best Financing Rate?
The best financing rates are generally reserved for buyers with good credit history. However, you can still work your way towards better interest rates by refinancing your auto loan as you make regular payments and improve your credit history. Always ask questions about financing to make sure you understand your options.
Can I Finance a Car with Bad Credit?
At Ontario Chrysler, we are pleased to offer financing options to buyers with all credit histories. Contact us today or apply for financing online to see how we can help you get into the Ram, Chrysler, Dodge, or Jeep of your dreams.
Conclusion
Choosing a financing term length will ultimately come down to your personal preferences and how a payment fits into your monthly budget. If you plan to keep your vehicle for a long time, a longer financing term can keep your monthly costs low. To save the most on interest, consider going with the shortest term length that you can afford.
Hadeel Hijazieh – VP Digital Marketing at Ontario Chrysler Group
Hadeel has over 15 years experience in Automotive Digital Marketing with a focus on Brand dominance. She is a member of the dealer council at various leading marketplaces in Canada. Outside of work, Hadeel can be found splashing acrylic paint over canvas in her home studio.
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