Who does 84+ month car loans

[OmarR]

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@Trudy wrote:

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@OmarR wrote:

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@Trudy wrote:

Reducing monthly financial obligations may be a sound reason.  Whether one should or not, I believe many people aren't really looking at the total cost when they simply need a manageable payment in most situations.

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That's the point that the others are trying to make, and you actually said it yourself perfectly. People are not looking at total cost and that is not financially wise.

I am all for reducing monthly financial obligations. By purchasing a cheaper item, not by stretching out how long I am going to be in debt. But that is just me.

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This is my point. It's an individual's choice for what works for them.  Sound advice as I get the math which I think most people get and it's obvious you'll be paying more.  But if it works for one's specific needs or situation then outside of the obvious, it works for that person.  How much equity do you really get out of a car? Some people are not looking to trade in and up regularly.  People choose to pay for a lot of things for various reasons that others wont.  Why not wait until one's scores are peak before buying?  That will save money.  I'm sure not everyone who purchased a vehicle was in the top tier.  I chose to pay a little more in interest for the presumed security in having a manageable payment should things go south.  Kinda like insurance for me.  I'm not encouraging longer terms, just saying a persons specific circumstances, needs and future plans may be the reason one chooses it.

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What iced said, but in the end, it usually ends up that it "didn't work for them". That is an illusion. 

[Dj4Money]

 The simple fact remains -

 Your wages have not kept up with:

 1) Inflation, Fed is keeping it as low as possible

 2) Communities which a vehicle is one of those. 

 3) Cost of housing in popular metro areas.

 Can you beat inflation, maybe. Can you buy cars below at market value rather than MSRP? Yes. Cost of housing is a funny one. It's about choice, it might be cheaper to live in Podunk, name a state usually in the middle of the country, deep south or extreme northeast. But for every negative thing that's been said about metro area from the high cost of living, commodities and the crime rate (which has been going down for 4 straight decades...) it's still better to live in a metro area despite the current crisis.

 Next month will be 0% for 84 month + money on the hood (rebates). 

[Anonymous]

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@Brian_Earl_Spilner wrote:

I think a lot of you aren't realizing how the market has changed. Thanks to SUVs, cars are being phased out everywhere. A mid-size starts in the high $20k and full-size starting in the low $50k. Add in desirable features, or even something simple like 4x4, and a full size truck or SUV can get to $80k nowadays. The average person can't afford them and their options are slowly dwindling. Even cars are starting to creep up with the average price being low $30k.  84 month loans will soon be commonplace and I suspect subscription services will become popular. Knock that term length all you want, but it's here to stay.

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I'd respectfully disagree with "their options are slowly dwindling."  I think back to the quality of cars in the late 90s and early 2000s. Good condition used cars of today are often better than new cars were then. Back then (which is really hard to type out btw >.<)  you could get an "average" new sedan for $15- 20k, minivans slightly more. You can spend the same money now and get a used car that's way better than that new car of yesteryear.

I'm a hypocrite driving a new car that cost $25k. I could have gotten a lesser equipped version for $18k. Or a used one for $14k. But, my expenses are low and I have no kids so that's my splurge.

People with more expenses, and especially if you have kids, are wasting a lot of money on most new cars. Going to an 84mo loan is just doubling down on a bad decision. We can't blame this on SUVs as people choosing overpriced SUVs in the first place is what caused that price increase. There still are options and those options are, on average, better than ever.

[Anonymous]

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@Trudy wrote:

I don't have an opinion as to whether its a good idea or bad idea as I believe that may simply be the individuals choice.  Reducing monthly financial obligations may be a sound reason.  Whether one should or not, I believe many people aren't really looking at the total cost when they simply need a manageable payment in most situations.  For me personally, I think different with a MTG loan, not so much a car loan.

I know we're talking about an 84m but have heard the same sentiment regarding 72.  I chose a 72 month loan , simply to get payments that should I lose my well paying job I could still pay on less income.  Even though shorter terms would have been a lower interest rate, the interest for me was relatively low and should something happen, feeling more comfortable/secure that I likely wouldn't lose my vehicle with the lower payment  was worth the extra money for me.  Purchased 9/2016 and I've paid much more a month which has pushed my payments out to 4/2022.  If I make the min payment each month going forward it will be paid for no later than 9/2020 (48m). 

When I had unexpected expense I was technically able to make less than the monthly payment or no payment while I worked on reducing that CC balance much quicker.  Not that it's important for me at this point but this positively impacts my installment loan% which positively impacts my score.  

Said all that to say, it may work for some.

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I agree with you wholeheartedly. I feel like by having the 'option' of a lower payment, need be, it gives the feeling if being a bit safer. I also think based on amortization and paying more than the minimum due, it actually costs less in interest $ than if you got the shorter term loan at the lower interest rate! I haven't seen otherwise yet. The point is, is you can actually save money with these longer terms loans at a but higher interest rates vs shorter term loans at lower interest rates as long as you pay more and then you also have the saftey net of having the option of a lower payment if an emergency or something comes up. The catch is you do have to stick to it. Setting up payments through billpay or autopay tmthat includes the additional amount usually is best so you never even have to think twice about paying the additional amount. It is just done and you won't miss it. You know, just IMHO...

[Anonymous]

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@Anonymous wrote:

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@Brian_Earl_Spilner wrote:

I think a lot of you aren't realizing how the market has changed. Thanks to SUVs, cars are being phased out everywhere. A mid-size starts in the high $20k and full-size starting in the low $50k. Add in desirable features, or even something simple like 4x4, and a full size truck or SUV can get to $80k nowadays. The average person can't afford them and their options are slowly dwindling. Even cars are starting to creep up with the average price being low $30k.  84 month loans will soon be commonplace and I suspect subscription services will become popular. Knock that term length all you want, but it's here to stay.

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I'd respectfully disagree with "their options are slowly dwindling."  I think back to the quality of cars in the late 90s and early 2000s. Good condition used cars of today are often better than new cars were then. Back then (which is really hard to type out btw >.<)  you could get an "average" new sedan for $15- 20k, minivans slightly more. You can spend the same money now and get a used car that's way better than that new car of yesteryear.

I'm a hypocrite driving a new car that cost $25k. I could have gotten a lesser equipped version for $18k. Or a used one for $14k. But, my expenses are low and I have no kids so that's my splurge.

People with more expenses, and especially if you have kids, are wasting a lot of money on most new cars. Going to an 84mo loan is just doubling down on a bad decision. We can't blame this on SUVs as people choosing overpriced SUVs in the first place is what caused that price increase. There still are options and those options are, on average, better than ever.

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I have to say I agree. I am unsure why people keep pushing for new cars. They are not that great. Longevity is not really what manufacturers struve for because people always want *new*, especially these days, so why make something built to last? My SO is a master automotive tech and he wont even consider letting me purchase a vehicle newer than 2013. Older if it were totally up to him. Granted, I do like some more modern features lol. If you do your research and have a good, honest automotive tech or mechanic to rely on, you will likely have a used vehicle that could last you several 100k miles and many, many years. You will pay less in the big scheme of things, even if the interest was not the lowest available, you know, the ones reserved for brand new cars, when you buy a solid, used car and *keep up with the maintenance*. My SO says it is commonplace for people to only put gas in and drive until the oil needs to be changed or until the vehicle breaks and then get another one. I guess that is just how some people do things. I am not saying everyone does this. Anyway, rant over lol

[MauiMan85297]

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@Anonymous wrote:

do you realize how horrible an idea an 84 month car loan is?  do you remember where you were during the 3rd month of Obama's second term?  That's when a 7 year car loan would have started if you just finished paying it off now..you want to pay for a car for that long...the iPhone 5 was the current iphone...do you get my point? buy less car..that's a horrible idea to take an 84 month period on a depreciating asset.

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Not unless it's at 0% then it's a great idea like Ford and Chevy are doing now during COVID and no payments for 90 days.  if they're charging 0% and those 3 payments are deferred just make sure you pay it off in 84 months

[Anonymous]

There are precious few vehicles I can foresee never being upside down at any point in a 60-month loan, that very short list completely disappears with an 84-month loan. 

Ford is doing 0% across 84 months, but if you decide to take one of these, you'd BETTER make sure that thing holds value, like a DIESEL Superduty. No Mustang (not even a Shelby) will do that. Given the question, I imagine you are not talking about buying something that could possibly appreciate, like a Ford GT. You should probably not be taking out loans to buy cars like that, unless the numbers make sense and they are making you money each month in something like an exotic car rental business. But even that industry is not what it used to be just 10-15 years ago. 

[Anonymous]

4.9% for 84 mos; 2020 new car; I could afford the payment but not the term. took it anyways &now finding out  that outside of dealership, no one would sell me GAP insurance? Go figure? Having read thru all posts before mine, i picked my exact reason for buying this term as outlined below

"I chose to pay a little more in interest for the presumed security in having a manageable payment should things go south.  Kinda like insurance for me.  I'm not encouraging longer terms, just saying a persons specific circumstances, needs and future plans may be the reason one chooses it."
Now its my choice if i buy GAP insurance on 84 months term, pay down significant additional principal to lower my balance, (20%+ of original balance) or refinance to 72 mos or better & get GAP insurance.