Quick Answer: Should I Do 60 Or 72 Month Car Loan?

Is 20 interest rate high for a car?

Generally speaking, the higher the interest rate, the more important it is to try to find another solution.

“I would say any auto loan that carries an interest rate in the 20% range is something you would want to get out of quickly,” said McClary..

Is it better to finance a car for 60 or 72 months?

Higher interest rates are another reason to stick with a 60-month loan. The longer the term, the more interest you will pay on the loan, both in terms of the rate itself and the finance charges over time. … Contrast that with a 72-month auto loan. The interest rate would be higher, which is common for longer loans.

Is 60 month financing a good idea?

The biggest advantage of 60-month car loans is that you have five years to pay them off. Because of this, your monthly payments will be much lower than if you have a three or four year loan. … The benefit is that you can potentially buy a more expensive car since the payments won’t be astronomical.

What should you not tell a car salesman?

10 Things You Should Never Say to a Car Salesman“I really love this car” You can love that car — just don’t tell the salesman. … “I don’t know that much about cars” … “My trade-in is outside” … “I don’t want to get taken to the cleaners” … “My credit isn’t that good” … “I’m paying cash” … “I need to buy a car today” … “I need a monthly payment under $350”More items…•

Is there a downside to refinancing a car?

Cons of auto refinancing Paying too much to transfer your car loan could cost more in the end than staying put. You could pay more interest over the life of the loan. … But if you extend the term of the loan, you might pay more interest over the life of the loan.

Can you negotiate APR on a car?

You can negotiate their interest rate. Or, you can get preapproved by online lenders, banks you work with often, or even credit unions. Then, you can walk into a dealership with a number to beat, and have more bargaining power with an offer in hand.

Why you should never pay cash for a car?

That is because credit card debt is unsecured, and a car loan is secured with the product that you drive off the lot. … A person who bought cash for their car, may be using their MasterCard for grocery shopping and bleeding money in interest rates each month, even if it’s paid on time.

How do you outsmart a car salesman?

20 Ways Every American Can Outsmart Their Car Salesman1 Show up with a good attitude.2 Don’t engage in the waiting game. … 3 Consider leasing before you buy. … 4 Shop for a less popular model. … 5 Try to use your banking rewards programs. … 6 Be sure to check the manufacturer’s website. … 7 It’s better to pay in cash. … More items…•

Is it better to finance car through bank or dealership?

In some cases, however, a dealer may negotiate a higher interest rate with you than what the lender offers and take the difference as compensation for handling the financing. … In general, you can usually get lower interest rates on a new car through a dealer than on a used car.

What is the shortest auto loan?

A short auto loan length may be 36 months to one borrower, and 12 months to another. A 60-month car loan was long considered conventional, but the average new-car buyer is creeping closer to 70 months. Some banks and credit unions even offer 96-month terms.

Is it bad to do a 72 month car loan?

Benefits of 72-Month and 84-Month Auto Loans There’s really only one benefit of a long-term auto loan that spans six to seven years or even longer. The longer the car loan, the smaller the monthly payment. … Because there’s more risk to the lender, you’ll have to pay a higher interest rate. The current average is 4.63%.

Is a 60 month car loan bad?

While I typically think financing a car for 60-months is not always a bad thing, I would definitely NOT go any longer than that. … All in all, I think that you should strive to use a 36 or 48 month loan because you will pay less interest and it will “help you” buy a car that you can better afford.

What is a good APR for a car loan?

Auto Loan Rates in January 2021Credit ScoreNew Car LoanUsed Car Loan750 or higher4.79%5.04%700-7496.02%6.27%600-69910.53%10.78%451-59917.60%17.85%1 more row•Jan 11, 2021

How much should you put down on a car?

As a general rule, aim for no less than 20% down, particularly for new cars — and no less than 10% down for used cars — so that you don’t end up paying too much in interest and financing costs. Benefits of making a down payment can include a lower monthly payment and less interest paid over the life of the loan.

Do car dealers care if you pay cash?

Paying cash for your car will reduce your time spent in a dealership, and you can avoid interest charges if the car you are buying does not offer 0% APR financing. However, paying cash will not necessarily guarantee you a better price, and in fact, it might cause you to pay a higher price.