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The Best Length For An Auto Loan?

Discussion in 'Off-Topic Discussion' started by jeremy_283, Jan 9, 2012.

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Whats the best length for an auto loan?

Poll closed Feb 8, 2012.
  1. 1 year

    3 vote(s)
    9.1%
  2. 2 years

    1 vote(s)
    3.0%
  3. 3 years

    6 vote(s)
    18.2%
  4. 4 years

    8 vote(s)
    24.2%
  5. 5 years

    11 vote(s)
    33.3%
  6. 6 years

    1 vote(s)
    3.0%
  7. 7 years

    0 vote(s)
    0.0%
  8. 8 years

    0 vote(s)
    0.0%
  9. 9 years

    0 vote(s)
    0.0%
  10. 10 years

    3 vote(s)
    9.1%
  1. Jan 9, 2012 at 1:33 PM
    #1
    jeremy_283

    jeremy_283 [OP] Super Member

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    Just Curious...
     
  2. Jan 9, 2012 at 1:38 PM
    #2
    Sunner

    Sunner Well-Known Member

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    I dont think you can pick a best? The shortest amount of time would be 'best' in my opinion so you pay less interest. I personally like to have more years so I do not have to pay as much per month. Depends on your situation I suppose.
     
  3. Jan 9, 2012 at 1:39 PM
    #3
    krap22

    krap22 Well-Known Member

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    shortest time possible that you can afford the payments unless you can get 0% financing.
     
  4. Jan 9, 2012 at 1:41 PM
    #4
    friction

    friction Well-Known Member

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    Expect Dave Ramsey lectures anytime now.

    I would suggest never financing for more than 5 years and either have GAP insurance or make at least a 20% down payment. 4 or fewer years would be more ideal.
     
  5. Jan 9, 2012 at 1:42 PM
    #5
    Lost_Humanity

    Lost_Humanity Bad decisions make great stories.

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    Bumper Dent Mod
    Totally dependent on your loan percentage.

    If you have 0%, then it doesn't matter. The higher the rate, the shorter the term. Saves some $$.

    For what it's worth, I prefer to buy my vehicles outright -- so 0 years. You generally get the best deal paying cash and no interest. Granted, I did not do this with my Tacoma, but at 1.9% over 5 years I'm not too upset.
     
  6. Jan 9, 2012 at 1:45 PM
    #6
    Pugga

    Pugga Pasti-Dip Free Since 1983

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    It depends a lot on the terms of the loan but trying to put that aside, I'd never go longer than 60 months on a car loan unless it was 0% interest. Cars are depreciating assets so the shorter the term the better off you are. Personally, I went with a short term (48 months) because the interest rates were lower and I wanted it paid off well before the repair bills started coming in.
     
  7. Jan 9, 2012 at 1:45 PM
    #7
    pyroskier

    pyroskier A country boy can survive

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    10 Year auto loan? 9/10 lenders or stealerships won't go over 7 years on an auto loan...
     
  8. Jan 9, 2012 at 1:54 PM
    #8
    jeremy_283

    jeremy_283 [OP] Super Member

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    I was just messin :p
     
  9. Jan 9, 2012 at 1:59 PM
    #9
    The Driver

    The Driver Trail Runner/Barefoot Beach Runner/Snow Skier

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    Or a ridiculously low interest. When I got my Taco, I was given a 2.5% interest for 48 or 60 months. You bet yer ascott, I got the 60!
     
  10. Jan 9, 2012 at 2:00 PM
    #10
    Oat

    Oat Well-Known Member

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    whatever you can afford to avoid the man backing his tow truck into your driveway at 2 am.
     
  11. Jan 9, 2012 at 2:14 PM
    #11
    DigB

    DigB Go Jets GO!!!!!!

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    I went 6 with a variable rate to get the lower payment, not everyone outright buy their vehicle... We are not all made of money. That being said I do plan on making double payments as soon as the wife's Rav is payed off.
     
  12. Jan 9, 2012 at 2:17 PM
    #12
    desert guy

    desert guy Well-Known Member

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    3-5 years is good. Just depends on the deal you are making.. **Just make sure you are paying a smart price for the vehicle and know what the market Value is on the particular Tacoma you are buying. It doesn't matter if you are paying 0%-3% interest on a vehicle if you over payed by $3,000. Because that won't matter if you got yourself in to a bad contract. Just be familiar with the fair market price, and you will be good. Toyota has great options for people sometimes
     
  13. Jan 9, 2012 at 2:20 PM
    #13
    The Driver

    The Driver Trail Runner/Barefoot Beach Runner/Snow Skier

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    Lakewood (Green Mountain), CO. I'm from Tampa. I
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    I agree with you in principle, but man clean Taco's are HOT on car lots!

    I feel like I overpaid about $3K give or take, but getting a used taco/4runner was the biggest pain in the rectum that I have ever felt!
     
  14. Jan 9, 2012 at 2:26 PM
    #14
    kbp68

    kbp68 hey...I can change this!

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    A new vehicle is by far the worst investment you'll ever make. You take your biggest depreciation hit as soon as you drive it off the lot and it will only depreciate from there. Unless you get 0% financing, make the biggest payment on the shortest term you can afford.
     
  15. Jan 9, 2012 at 2:26 PM
    #15
    TeamSarcasm

    TeamSarcasm Mr. President

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    I think for me or anyone else in college having the longer pay outs are better even if you can afford more just in case money gets tight.

    But I do agree, pay the most you feel you can comfortably.
     
  16. Jan 9, 2012 at 2:26 PM
    #16
    macgyver

    macgyver Well-Known Member

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    Depends on the vehicle and depends what your plans are and your financial situation.

    Personally, I took out a 6 year loan only because:
    1. It's a Tacoma and holds its value really well so I didn't have to worry about being upside down on the loan it like you would with some vehicles. I'm 2 years into the loan and I currently owe about $13k on the truck, I could sell it for around $20k today based on what they're selling for locally so I have a decent amount of equity in it.
    2. I bought the truck used for about $4k under market value bc the previous owner was trying to dump it cheap to get out of the payment. This one kinda goes with #1
    3. I wanted a lower monthly payment
    4. I plan on driving the truck until the wheels fall off, then put the wheels back on and keep driving it until the motor goes bye bye, then put another motor in and keep driving it.
    5. I'll probably pay it off in a year or two with my annual bonus from work.

    If I hadn't gotten the deal I did and wasn't buying a tacoma, I would have gotten a shorter loan term to avoid negative equity. Currently, If I ever needed to dump it to get out of the payment for some reason, I could sell it and not lose my ass and still have some money to buy a cheap dependable daily driver.
     
  17. Jan 10, 2012 at 10:00 AM
    #17
    desert guy

    desert guy Well-Known Member

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    You are so right! Toyota's hold there value more than anything out there. Especially Tacoma's!
     
  18. Jan 10, 2012 at 10:13 AM
    #18
    whippersnapper02

    whippersnapper02 Well-Known Member

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    It depends on what you can pay. I took 7 years just in case something bad happened. I'm paying it off in 3 years. And yes the extra that I pay goes toward principle.
     
  19. Jan 10, 2012 at 10:29 AM
    #19
    surferkid

    surferkid Zombie Killer

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    i have a low interest rate so i got a 60 month loan but i asked my lender how much the payment would be on a 36 month loan and pay that each month. This way if things get tough i can just pay how much it normally is.
     
  20. Jan 10, 2012 at 10:42 AM
    #20
    4Wheelin4Banger

    4Wheelin4Banger Longtime Toyman

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