The Pros And Cons of 84 Month Auto Loans

One in four automobile loans are 72 months or longer.  Recently, it’s been easier to find automobile dealers offering 84 month auto loans and also offering a lower down payment. 

Loans as long as 84 months are now offered more widely than ever. Automobile makers that once offered 72-month automobile loans are now offering below-market rates on those six-year loans as another way of doing business.

If you caulate payment for loans for your automobile, monthly payments with an automobile loan of 84 months is easier on the pocket.  Below are more pros and cons regarding this issue.

Pros

·         Automobile transaction prices are increasing, and people are buying more expensive automobiles. Longer loans are being used to get a lower monthly payment.

·         Longer loans mean a lower monthly payment. An 84-month loan produces a lower monthly payment than a 60-month loan at 0 percent interest commonly offered by automobile makers.

·         Seven-year loans for less than 4 percent is available from some lenders for those with top credit but this also depends on the financial institution.

Cons

·         Longer loans are not best for many automobile buyers. Some have a remaining loan balance that will exceed the value of the automobile for a longer period of time because of the slower build-up of loan equity.

·         Longer automobile loans could leave buyers with a balance that must be paid off at the time of trade-in.

·         84-month loans on automobiles are limited to those with top credit ratings.

·         Many automobiles will be out of warranty at the time that there are still automobile loan payments.

·         Automobile buyers use longer loans to finish paying what they still owe on their trade-in and make a new automobile purchase. They're paying for both their current automobile and their last automobile.

Written by: Katrina Marion

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