ANSWERS: 9
  • This is a fairly new concept (in the U.S. at least), but many dealerships, banks, and credit unions offer financing beyond the typical 60 month maximum. Mercedes Benz began offering a 7-10 year finance option back in the late 90's. A lot depends on the car and the buyer's credit in terms of being approved for such a loan. I also understand the interest rates can be (but not always) higher than on a standard 24-60 month lease/loan. I asked a dealer once who was crazy enough to "mortgage" a car. He said that some people just liked to have the flexibility to pay less or more when they choose and that most people end up paying it off sooner than 84-120 months. He also said that the loans appealed to those who had good credit and income, but fell a bit short of being able to afford a luxury vehicle at 24-60 month terms at that point in their lives, so they take longer loan terms. So getting back to your original question, check with your bank or credit union first to see if they offer such a loan as they typically offer better interest rates than dealerships. The dealer financing should be your last resort, but check their rates anyway because every once in awhile the dealer or even the manufacturer can come in lower than a traditional bank or credit union. One last thing, before you decide on a long term loan, do the math. Factor in depreciation on the vehicle you are looking at and take it from there. There is nothing worse, or so I am told, to have a car payment and repair bills. Or a car loan balance that is far more than the car is worth. Compare how much more interest you will pay on a 24-60 month loan vs a 84-120 month loan. I saw a guy do a 10 year loan on a Mercedes Benz once and just the interest was enough to buy a nice Honda. Ouch. Hope this helped :)
  • Are you sure you can locate an auto that will last that long, without major repairs? You can always refinance the auto, if the other is not available. but, this its gonna cost you.
  • again...pay it off earlier. also make sure that it is a loan that you only pay interest on the amount you owe not the amount you finance originally. that happened to me because i did not know that the later was out there and was furious when i was 24 months into a 48 month loan and called for the pay off and it was only FOUR thousand less than i financed!! imagine my anger! so i refinanced just to prove a point to that lender...that they could not hold me hostage as they probably did a lot of other folks. this was HSBC. my credit union is always a better bet but i bought on a sunday and made a really bad decision to finance w/the dealer. also...i had 720 credit score and they still claimed they gave me the best deal they could. car fincance folks are crooks...so be smart when or if you do go to them!! also, there is a 10 year loan out there. i saw it on google search. there is no prepaymet penalty but you cannot pay it down just off. if i see it again, i will come back and leave the link. just be creative in your google searches...you can find anything out there!
  • why would anyone finance a car for 8-10 yrs?
  • I am buying a wheelchair accessible Honda Element next month. The dealer offered me 10 year financing at a decent(not great) interest rate. Many people who use wheelchairs have limited means to pay for vehicles that start at $40,000 and can easily cost $70,000. This is because their employment options might be limited or they spent a boat load of money making their homes accessible etc. because this car will only be driven when my family member needs their power wheelchair and I have another car for a daily driver I expect to put ~5000 miles/year on the car and make it last 10+ years.
  • I would check with your bank regarding personal loans. An auto loan usually only goes as long as 6 (sometimes 7) years. A personal loan can be financed for a different period of time.
  • There are a lot of people like me who would like to do a long term finance on a classic car. For some of your depreciation questions. Classic cars go up in value not down. Answer to another question: YOU CANNOT get a classic car on a car lot. For the person who said to pay it off earlier: Maybe they are looking for long term financing because they cannot afford a new car but really need one for work,school, or to just get around town.
  • A 10 year loan is a whopper! First off, as a former car salesperson I can tell you that when you finance longer than 72 months you can't purchase GAP or a warranty, so you're stuck with the factory warranty as long as that lasts. Secondly, By the end of it's 6th year the van will only be worth around $4,000, and you'll still be paying more than this by stretching the payments. Honestly, sir or maam, if you can't afford a 6 year loan you might want to look at a reasonably priced used van that you can add your wheelchair equipment too. If you are in a major car wreck any time in the first 5 years of that loan (probably longer) you're going to be in real financial trouble due to the resale value vs. what you owe. Good luck to you! Hope this helps!
  • Why pay double the price?

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