here's my situation...i'm close to purchasing an '03 s2k this weekend. i'm putting $3k down regardless and payments are roughly going to be around $370. i just found out my credit union can finance up to 84 months, but with a min. purchase of $25000. and when i did the calculations, i'd be paying almost exactly the same amount of a used $23k s2k and a brand new s2k. let it be known that i did type in the appropriate interest rates for both. question is...is it stupid to finance for that long of a term? i plan on eventually paying off the car early once my business goes up. but then again, nothing's ever set in stone. my dilemma is: new or used? 60 or 84 months?

 

I wouldn't that's a LONG time unless you know for sure you will have the money to pay it off early. Even the '03 for 60 months? Sounds like you can't really afford the car just yet.

 

I would say you never should get a car loan for more then 60 months. Most car loans are simple loans meaning you can pay more each time without penalty and eventually pay off early without penalty. Getting the loan for longer is not a bad deal if you can pay if off early, the length just gives you the ability to have/use less funds for an individual payment. I just got my loan for 60 months and with 4.4 apr so my payments are about the same as yours but I went with an MY00 so it was a bit cheaper, because I knew I couldn't afford more. I agree with the other fellow it sounds like if you want the loan for that long you can't afford the car. Also, see what kind of deal a dealership has for interest. Beware interest rates are on the rise.

 

No.

 

Just out of curiosity, what kind of interest rates are you looking at?

 

Sure

I always go for the longest term to get my payments the lowest. I pay more on the loan each month, but there might be a run of bad luck at work or something like that where making the lower payment doesn't break the bank.

As long as you pay a significant amount more on the loan each month the interest rate and length don't make much difference in a simple interest loan.

 

mine is a 72 month term

 

well, the interest rates i'm looking at come from my credit union. a brand new car with a 72-84 month term is 5.49%. i'm 99% sure i'd get this rate because my credit is excellent(mid 700s). a used car rate for 60 months is 3.99%. now, i can afford both cars. that's not a problem. i was just thinking that for the price i'm going to pay for a used car, i could get a brand new one but attached with an 84 month term. again, i plan on paying off the car sooner than the 7 years. hmm...if not a brand new one, then maybe a slightly used '04. any other suggestions?? thanks to everyone who's replied so far.

i forgot to add that my limit is $380 a month. surely, i could go as high as $500...but i do have other passions, bills, and hobbies. know what i mean?

 

I think the more important question here is which car would you rather have? The '03 with the different suspension and 9k engine or the newer car with the changes to the chassis and the 2.2L.

I financed my used '02 for 72 months through a credit union as well. I was going to do 60 months, but the difference in interest to do the longer rate was only a quarter point (4.75 vs. 4.5), and the minimum payment was about $50 less giving me a little breathing room in case things get tight one month.

A quick aside to those folks who are suggesting that maybe he can't afford the car...just because you don't have the budget to finance a car over 2-3 years and pay $600-700 a month does not mean you can't afford to buy it. There are surely much "smarter" things I could be doing with my money than paying for a sports car as a SECOND car (I also own an RSX-S), but the s2k has been a dream and a passion to me and if I wait until I can "afford" it I could be dead or crippled.

If financing a car for 84 months allows someone to more comfortably attain something they want than I say go for it!

Two words of advice though...GAP INSURANCE!!!!

Craig

 

If your payment limit is stuck at under $400.00; you should consider a lease too.