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Longer Car Loans in Port Colburn - Pros and Cons

Longer Car Loans in Port Colburn - Pros and Cons

Yesterday we discussed the pros and cons of shorter auto loans. It only seems fair to do the same for longer car loans today as they are more popular than short loans.


We tasked our Port Colburn auto loans team to outline the main pros and cons of longer auto loans of 72 or 84 months.


Longer auto loans in Port Colburn


Longer auto loans are typically those that last for 72 or 84 months. That’s 6-7 years. You can occasionally get longer loans but these are usually the longest consumer loans available.


Pros of longer auto loans


There are several benefits to longer auto loans in Port Colburn.


Borrow more – The main benefit of a longer auto loan is the ability to borrow more while keeping the monthly payment reasonable. With the rising cost of new cars, people are having to borrow more to be able to pay for them.


Lower monthly payments – You can also borrow a more modest amount and have lower payments each month. This can help if you’re not earning much or have other outgoings you need to manage.


Affordability – Longer auto loans can help you pass the affordability test to qualify for the loan. If you already have significant monthly outgoings, a lower monthly payment may enable you to get the loan where a standard loan wouldn’t work.


Buy a better car – While technically, this is covered under borrowing more, many clients we talk to express the benefits of 84 month loans as being able to buy a premium or better car.


Cons of longer auto loans


There are also downsides you need to consider for longer auto loans.


Longer period of negative equity – If you’re buying a new car, you will have negative equity for longer. Not an issue if you’re planning to keep the car but could be a challenge if you want to upgrade quickly.


Higher interest rates – Many lenders charge higher interest rates on auto loans over 60 months as the risk of defaulting is higher.


Pay more interest over the term – Not only might you pay a higher rate, you’ll also pay that rate for longer. While the monthly cost will be lower, the overall cost of borrowing will be much higher.


Still paying for an old car – In theory, a 7 year loan means you’ll still be paying for your car when it is an old car. A 7 year old car is still perfectly serviceable and reliable but it won’t be at the cutting edge anymore.


We arrange lots of 72 and 84 month loans for borrowers who are more than happy with them. If the pros and cons work for you, it could work for you too. Only you can answer that question.


Once you have the answer, our Port Colburn auto loans team will be here to help.


When you’re ready for a car lease or loan, get in touch with the Port Colburn auto loan experts at Northway Ford for great deals on auto finance.


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