Quote:
Originally Posted by Meeni
60 month on a used car is too long. Hell, it's even too long on a new car. Cars depreciate, with a 60 month load the car depreciate faster than you repay and you end-up upside down for the majority of the ownership. Also just look at the absolute cash value of interest you are paying w.r.t. the stiker price of the car. This is obscene.
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Disagree.
There is no "too long" or one-size-fits-all answer here. Only "what works for me in my situation".
When I financed my last new car (50% paid, 50% financed) my 60 month rate was 3% and 72 month rate was 3.19%. I took the 72 month because the roughly $2,000 difference over the term of the loan was worth the lower payments and security knowing that if I need more financial flexibility I have it. Sure I'll probably pay it off before 72 months, but I have the full 72 months if I want it and while credit is still cheap right now I'd rather lock that in and let it ride. This goes against my own advice, since I would have told myself to finance the whole thing at 3.19% and use that cash elsewhere, but that's a different topic.
The stigma of being upside down on a car like this is also kind of overblown IMO. You're either taking the loss in the upfront and losing on the opportunity cost of that money, or taking the loss in the end. Either way, it's the same to me but that's just my opinion.