Open navigation Main Menu Mortgages
Financing a home purchase refinancing your current loan Finding the right lender Additional Information
Looking for a financial advisor? Try our three minute test and then match up to an adviser today.
Main Menu Banking
Compare Accounts Use calculators Get assistance from Bank reviews
Looking for a financial advisor? Do our 3-minute quiz and then match up with an advisor today.
Main Menu Credit cards
Compare by category Compare by credit needed Compare by issuer Get advice
You’re looking for the ideal credit card? You can narrow your search using CardMatch(tm)
Main Menu Loans
Personal Auto Loans and Loans for Students Calculators for loans
Find a personal loan within 2 minutes or less. Answer a few questions to get offers–with no impact to your credit score.
Main Menu for Investing
Best of Brokerages and robo-advisors . Learn the basics Additional information
Looking for a financial advisor? Try our three minute test and match to an adviser today.
Main Menu Home equity
Get the best rates Lender reviews. Calculators. base
Looking for a financial advisor? Take our 3 minute quiz and match to an adviser today.
Main Menu Real estate
Selling a house Buying homes Locating the right agent sources
Looking for a financial advisor? Take our 3 minute quiz and then match up to an adviser today.
Main Menu Insurance
Car Insurance Homeowners insurance Other insurance reviews of the company
Looking for a financial advisor? Take our 3 minute quiz and connect the advisor you want today.
Main Menu Retirement
Accounts and retirement plans. Find out the basics about retirement calculators Additional resources
Looking for a financial advisor? Take our 3 minute quiz and match with an advisor today.
The search is open and closed.
Submit
Is a long-term car loan is a good idea? Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our aim is to assist you make better financial choices by offering interactive tools and financial calculators, publishing original and objective content, by enabling users to conduct research and compare data for free and help you make sound financial decisions. Bankrate has agreements with issuers including, but not limited to American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money The offers that appear on this website are provided by companies who pay us. This compensation may impact how and where products are displayed on this website, for example for instance, the sequence in which they appear in the listing categories in the event that they are not permitted by law for our loan products, such as mortgages and home equity and other home lending products. But this compensation does not influence the information we publish, or the reviews you see on this site. We do not include the universe of companies or financial offers that may be open to you.
SHARE:
The Page On This Page In This Page
Prev Next
Westend61/Getty Images
4 minutes read. Published 30 January 2023
Written by Rebecca Betterton Written by Auto Loans Reporter
Rebecca Betterton is the auto loans reporter for Bankrate. She has a specialization in helping readers to navigate the ins and outs of securely taking out loans to buy a car.
Edited by Rhys Subitch Edited by Auto loans editor
Rhys has been writing and editing for Bankrate since late 2021. They are committed to helping readers gain the confidence to take control of their finances through providing concise, well-researched and well-sourced information that breaks down complicated subjects into digestible pieces.
The Bankrate promise
More info
At Bankrate we aim to help you make better financial decisions. We are committed to maintaining strict editorial integrity ,
This post could contain references to products from our partners. Here’s how we make money .
The Bankrate promise
Established in 1976, Bankrate has a long history of helping people make smart financial choices.
We’ve earned this name for more than 40 years by simplifying the process of financial decision-making
process, and giving people confidence in the decisions they will follow next. process and gives people confidence in the next step.
So you can be sure you can trust us to put your needs first. All of our content is created with and edited ,
We make sure that everything we publish is objective, accurate and reliable. Our loans editors and reporters focus on the areas that consumers are concerned about most — the various types of loans available, the best rates, the best lenders, ways to repay debt, and more — so you’ll feel safe investing your money.
Integrity in editing
Bankrate follows a strict standard of conduct, which means you can be confident that we put your interests first. Our award-winning editors and reporters provide honest and trustworthy content that will help you make the right financial choices. Key Principles We appreciate your trust. Our aim is to provide readers with accurate and unbiased information, and we have standards for editorial content in place to ensure that this happens. Our editors and reporters rigorously verify the truthfulness of content in order to make sure the information you’re reading is correct. We maintain a firewall between our advertisers and our editorial team. The editorial team of Editorial Independence Bankrate does not receive compensation directly from our advertisers. Editorial Independence Bankrate’s editorial staff writes in the name of YOU the reader. Our aim is to provide you the most accurate advice to aid you in making informed financial decisions for your personal finances. We follow rigorous guidelines that ensure our content is not in any way influenced by advertising. Our editorial team is not paid any compensation directly from advertisers and all of our content is checked for accuracy to ensure its truthfulness. Therefore, whether you’re looking at an article or review, you can be sure that you’re receiving reliable and dependable information.
How can we make money?
There are money-related questions. Bankrate can help. Our experts have been helping you manage your finances for more than four decades. We continually strive to provide consumers with the expert guidance and the tools necessary to succeed throughout life’s financial journey. Bankrate adheres to a strict code of conduct policy, which means you can be confident that our content is honest and accurate. Our award-winning editors, reporters and editors provide honest and trustworthy information to assist you in making the best financial decisions. The content we create by our editorial staff is objective, truthful and is not influenced by our advertisers. We’re honest about how we are capable of bringing high-quality content, competitive rates, and useful tools for you , by describing how we earn money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We receive compensation for placement of sponsored products and, services, or when you click on certain hyperlinks on our site. So, this compensation can affect the way, location and in what order products appear within listing categories in the event that they are not permitted by law for our mortgage home equity, mortgage and other products for home loans. Other factors, such as our own proprietary website rules and whether the product is offered in your area or at your own personal credit score could also affect the manner in which products are featured on this site. Although we try to offer an array of offers, Bankrate does not include information about each financial or credit item or service.
The process of buying a car is much more than choosing whether to buy an SUV or sedan in black or red. If you’re buying the car using a loan it is also necessary to figure out which repayment terms make most sense for your financial and budget goals. Car prices are still steep compared to before there was the pandemic COVID-19. The cost of a new car for December of 2022 was more than $49,500 – five percent more than the same month a year prior and over 20 percent more than December 2020 . The longer your loan term — typically ranges from 24 to or between two and seven years, the less expensive your monthly payment will be. But be aware that a lower monthly payment has drawbacks, including potentially costing you more in the course of time. For most drivers, a long-term car loan should not be a great choice. There are many reasons not to take out a long-term car loan longer-term car loans are appealing because the monthly installments will be smaller than those with a shorter-term car loan. While they let you buy a more expensive car , but still make the payment affordable, long-term car loans can place you in a more difficult spot financially If you’re not careful. More likely to become upside down on loan A longer loan period means that you’re more likely to become upside down eventually upside down in near future. Being upside down on an auto loan is when you owe more than the car is worth. This is due to a greater portion of the monthly payment early in the loan will be used to pay interest rather than the principal due. In the event of an upside-down loan, it can be dangerous for several reasons. If you are involved in an accident that caused the vehicle is considered to be a total loss, you may end up having to pay off the loan on a car that you are unable to drive if insurance doesn’t cover it. In addition, the longer you are upside-down on the car loan, the longer you have negative equity. The idea of trading in a car that has negative equity could mean that you won’t get enough money to pay back the loan — and you may even have to you take out. Vehicle depreciation is less of an issue for used vehicles within the first few years. But, long-term loans on cars that are used aren’t a good idea. A used car likely already has plenty of miles, and a longer-term loan allows the miles to pile up even higher. For example, assume that you purchase a car that is three years old with 36,000 miles on it, which is what the typical American will drive for this amount of time. If you took out a 6-year loan and you drive 12,000 miles per year, which is the norm in America, you would add 72,000 miles. This means that your vehicle will have 108,000 miles and will be nearing 10 years old by the time you pay it off. If you decide to trade it in sooner, you may find it’s not worth much, or worse, that there is no equity at all. Higher interest Longer-term lengths typically are accompanied by higher rates . This is due to the fact that longer loans are more risky for lenders. If you have a long loan term you are more at risk of things could impact your financial situation prior to the loan is fully paid. Even in cases where the interest rate for the long-term loan is the same as a shorter term however, you’ll still have to pay more in interest over the course of the loan because you will be paying interest for a far longer period. While your bank account may be relieved from the reduced cost, the price may not be worth it. This is a crucial factor to take into account since the Federal Reserve continues to to combat the issue of pandemic-related inflation. When the Fed raises benchmark rates, it raises the interest rates that private lenders provide for personal loans and auto loans. The new average loan price for the year 2022 was 5.16 percent . However, rates ranged between 3.84 percent to those having the best credit scores, to 12.93 percent for borrowers who have the weakest or the least subprime scores. Stuck with the same vehicle Prior to signing a car loan that’s up to 84 months, make sure you’ve and consider whether you’ll want to drive that same vehicle throughout the entire term. Seven years is a long duration. Your needs and circumstances could shift. However, if you take out a long-term loan you’ll remain with the same vehicle. And in most cases it is the case that extending the loan is costly. Alternatives to a lengthy car loan There are other alternatives to purchase a car without taking the risk associated with a long-term car loan. You can lease a car if you’re having trouble getting accepted for a favorable loan, you may . Leases can offer more affordable monthly payments. Even drivers with fair credit are more likely to get approval for a lease however, you are able to drive an incredibly new car. The negatives of leasing are important to take note of. They have restrictions on how many miles you’re able to drive during the lease period and fees in excess wear and wear and tear. Perhaps most important is that you’ll be required to either return or replace the car at the lease’s expiration. Get a co-signer A with good credit provides potential lenders with additional assurance that you will pay off your loan. This increases the likelihood to get approval even if you have credit score is not perfect. Consider a large down payment If you want to lower your monthly costs by making a large down payment down payment is an excellent alternative. The larger the amount you deposit initially then the less your monthly payments will be. Also, you are likely to get better interest rates with your lender. Do you think a long-term auto loan worthwhile? A long-term auto loan is not usually an option due to the added financial risk. While the lower monthly payments on a long-term car loan might be attractive initially, it’s best to save extra cash to make the down payment or opt for a cheaper car, so the monthly payment is reasonable for a smaller loan. The main point to remember before signing to a long-term auto loan, consider the downsides. While it will cost you more over the duration of the loan, you may also end in a position where you’re upside down on the loan . What’s more, your vehicle requirements could change within five to seven years when you’re still paying back that loan. Take a look at options for long-term loans for example, making a bigger down payment or leasing a vehicle, or finding a co-signer whose credit score could help you achieve better loan conditions.
SHARE:
Authored by Auto Loans Reporter
Rebecca Betterton is the auto loans reporter for Bankrate. She has a specialization in helping readers to navigate the details of borrowing money to purchase a car.
Edited by Rhys Subitch Edited by Auto loans editor
Rhys has been writing and editing for Bankrate since the end of 2021. They are passionate about helping readers gain the confidence to take control of their finances with concise, well-studied facts that break down complicated topics into bite-sized pieces.
Auto loans editor
Related Articles Auto Loans 6 min read Mar 02, 2023
Auto Loans 3min read Jan 30, 2023
Equity in the Home Equity Read 3 minutes December 12 2022
Auto Loans 4 min read Aug 19 2022
About
Help
Legal Cookie settings Do not share my information with anyone else.
How we make money Bankrate.com is an independent, advertising-supported publisher and comparison service. We receive compensation for the promotion of sponsored goods and services or by you clicking on specific links on our site. So, this compensation can impact how, where and when products are listed, except where prohibited by law for our mortgage or home equity products, as well as other products for home loans. Other factors, such as our own proprietary website rules and whether or not a product is offered in your area or at your self-selected credit score range could also affect how and where products appear on this website. While we strive to provide the most diverse selection of products, Bankrate does not include information about each financial or credit item or service. Bankrate, LLC NMLS ID# 1427381 | BR Tech Services, Inc. NMLS ID #1743443 |
|
(c) 2023 Bankrate, LLC. A Red Ventures company. All Rights Reserved.
If you have any inquiries pertaining to where and the best ways to make use of real payday loans online same day (financeusrw.site), you could contact us at our web site.