84 Month Car Loans in Canada: Good Idea or Not?

84 Month Car Loans in Canada: Good Idea or Not?

Posted on February 1, 2023

Auto loans used to be for 36 or 48 months. With the higher price of cars and the wider variety of situations people find themselves in, 84 month car loans are now available in Hamilton.

But are they a good idea?

As always, the answer to that question depends on your personal circumstances.

84 month Car loans

84 months, 7 years, is a long time. Cars change a lot and our lives change even more. It’s a long time to commit to a car loan but it can have its benefits. Rather than tell you what to do, let’s list the pros and cons of 84 month auto loans.

Pros of 84 month Car loans

Longer car loans definitely have benefits, such as:

• Competitive interest rates – You can find some very competitive rates on leading 84 month auto loans in Hamilton. Just remember, the longer the term, the more interest you’ll pay!

• Borrow more for a better car – You can often borrow more over this term which means you can afford a better car, something more luxurious or something sportier.

• Lower monthly payments – You can also use an 84 month auto loan to borrow the same but pay less each month. That means still having the car you want without taking up so much of your monthly income.

• Build credit over the longer term – As long as you always pay on time, a longer car loan means a longer payment history of paying on time. Your credit score will love you for that!

And Now The Cons!

Longer Hamilton auto loans aren’t all good news though. You should watch out for:

• Pay more interest over the term – Auto loans charge interest over the term of the loan. The longer the loan, the more interest you’ll pay.

• Longer period of negative equity – If you buy a new car, the potential for being upside down is higher and potentially for longer depending on your down payment.

• Vehicle warranty could finish before the loan – Not many automakers offer 7 year warranties on their cars. That means your car could be out of warranty before it’s paid off.

• Vehicles and technology change fast – The rate at which vehicles develop and technology changes is getting faster. What was new and cutting edge 7 years ago is old news now.

As you can see, there are good points for 84 month auto loans and not so good points. Depending on your situation, one will likely outweigh the other.

They can be a great idea if you don’t want to lease and would prefer lower monthly repayments.

They may not be such a good idea if you like driving the newest cars or using the latest technology.

Remember though, you can usually repay 84 month auto loans early so it isn’t as if you’re stuck with it for the full 7 years. Just check the small print first to make sure you’re not charged any early repayment penalties!

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