How Long Should You Finance a Car?
Table of Contents
Key Takeaways
- Choosing a longer financing term can help to keep your payments low
- Shorter financing terms can help you pay off the loan quicker and save on interest
- Financing promotions can help you get the best possible rate
How to Choose a Financing Term: How Long Should You Finance For?
If you are looking to finance a vehicle you might feel a bit unsure about how long to finance the vehicle for. Financing terms are typically available from as low as 24 months, though they can range up to 96 months. There is no right or wrong answer when it comes to choosing a financing term, and the one you choose should suit your budget and preferences best.
At Team Chrysler, we are the Jeep, Chrysler, Dodge, and Ram dealership Mississauga 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 with so many options available. In this post, we compare the pros and cons of longer and shorter financing terms to help you understand your options better.
If you are looking for the lowest possible monthly payment and plan to keep your vehicle for a long time, a longer-term loan could be your best bet. These loans will generally result in you paying more interest over the course of the loan but can reduce your monthly costs. If you want to spend as little on interest as possible, a shorter financing term may be better suited to your needs.
Pros and Cons of a Shorter Financing Term
| Pros | Cons |
|---|---|
| You will pay less for interest compared to longer terms | Your monthly payments will be higher |
| Your loan will be paid off faster, giving you more flexibility | Higher monthly payments could strain your monthly budget |
| There is a lower chance that you will be underwater on your loan for a long time |
Pros and Cons of a Longer Financing Term
| Pros | Cons |
|---|---|
| Longer financing terms generally result in lower, more manageable payments | You are more likely to be underwater at the start of your loan with a longer-term loan |
| Having a lower car payment can free up money for other important expenses | You might want or need to change vehicles before your loan is paid off |
Frequently Asked Questions
What Can I Do to Get a Better Financing Rate?
The best financing rates, including promotional rates, are typically only available to buyers who have good credit history. However, this does not mean that those who are building credit cannot get a car loan that makes sense for their needs. To obtain a better financing rate, you might want to consider refinancing your vehicle once you’ve built more credit by paying off your loan.
Can I Finance a Car with Bad Credit?
At Team Chrysler, we want you to drive a vehicle that you love. 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. We work with buyers with all types of credit history.
Conclusion
Choosing the length of your financing term typically comes down to personal preference. If you are looking to keep your monthly car payments low, a longer term for financing is often a great choice. However, if spending less on interest is your goal, a shorter term that allows you to pay the vehicle off faster could be a better option.
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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