880 Walkers Line, Burlington, ON, L7N 2G2, Canada

What is the Best Car Loan Length in Smithville?

What is the Best Car Loan Length in Smithville?

Choice is one thing car buyers have plenty of right now and we think that’s a good thing. Choice can often bring confusion, which we’re tackling in part today with ‘longer auto loans vs. shorter loans. We asked our Smithville auto loans to explain the pros and cons of longer loans and shorter loans so you can make an informed choice on the best car loan length for you.

 

Pros of longer auto loans

 

There are definite upsides to longer auto loans.

 

You can borrow more – Longer loans stretch the loan principal out for longer, meaning you can borrow more while keeping payments sensible.

 

Buy a better car – Borrowing more means you can afford a better or newer car with that extra money.

 

Lower monthly payments – Or you could borrow less and have lower monthly payments, making the entire loan more affordable.

 

Cons of longer Smithville auto loans

 

There are disadvantages to longer auto loans though.

 

More expensive over the term – Loan interest is paid monthly so the more months you have the loan, the more interest payments you’ll make.

 

Higher likelihood of going upside down – If you buy new, you’ll likely be upside down for longer as payments will be lower and it will take slightly longer to rebalance the loan.

 

Lower trade in or resale value – The longer it takes to pay off the car, the less it will be worth once you’re done.

 

You’ll be paying for longer – One of the best things about an auto loan is when it comes to an end. That will be a long time with a longer auto loan!

 

Pros of shorter auto loans

 

There are upsides to shorter auto loans too.

 

The loan is paid off faster – You could be driving your car while still relatively new and it would be all paid off.

 

Lower interest over the term – The shorter the loan, the fewer interest payments you’ll have to make, so it’s cheaper over the term.

 

Upside down for less time – If you buy new, you’ll be upside down for much less time, if at all

 

Car will be worth more when paid – Pay the loan off faster and the car will be worth more when it comes time to trade in or up.

 

Cons of shorter Smithville auto loans

 

There are also downsides to shorter auto loans.

 

Higher monthly payments – Unless you’re borrowing considerably less, your monthly payments will be higher to pay everything off in a shorter time.

 

May need a larger down payment – To balance the extra expense of a shorter loan, you may require a larger down payment.

 

May attract higher interest rates – Unless you shop carefully, shorter loans can often charge higher rates so the lender makes more profit.

 

On balance, we think shorter auto loans make most sense as long as you can afford it. Interest will be sensible, you can still get a new car and you won’t be paying an auto loan forever.

 

If you do need a longer loan, we can help find a competitive deal and the best car loan length for you. Just contact one of our team.

 

We will use all our skill and experience to deliver the lowest possible Smithville auto loan rates, guaranteed. Contact Car Nation Canada Direct to learn how we can help.

 

Thanks for reading. Be sure to connect with us on Facebook, Twitter, Instagram, or LinkedIn to stay up to date on our latest great articles!

Categories: Auto Loan

Tags: ,