There is a widespread assumption that taking out a car loan with a term of 7 years or more is simply not a good idea. No ifs, and or buts.
Every single person’s financial situation is different. And the difference between a 5-year car loan and 7-year car loan - for the exact same car - can mean substantially lower monthly repayments.
The argument against a longer-term car loan is the amount of interest that’s paid over the life of the loan. Which is certainly something to take into account if you’re considering going with a 7-year car loan or longer, sure.
Current interest rates are exponentially low, which means the overall interest you’ll pay for a loan that’s just 2 years longer or so won’t actually equate to as much as it used to.
And when increasing the length of the loan allows you to purchase a better car, one that you love to get behind the wheel of every single time, that sounds a heck of a lot better than settling for something you’re a bit ‘meh’ about, too.
So, yes or no?
Whether you go with a 7-year car loan or not is entirely up to you and will depend on your individual circumstances. If you’re able to get the car you want and can afford to go with a lower-length loan, go for it.
But if it means the difference between a ‘meh’ car and the car of your dreams, or the lower-length loan is going to really stretch your monthly budget, it might be worth considering the 7-year option.
Of course, always consult with your accountant to determine what you’re able to afford.
Have a chat with us today to learn how we can help
Whether you’re after a 1-year to a 7-year car loan or anything else out there, we’re here to find you exactly what you want. Our 20-plus years in the car finance industry has enabled us to build up a massive lender network which we’ll tap into and match you with the ideal car finance package to suit your needs to a T.
Take the next step now by calling us on 1300 787 288 or, alternatively, sending us a message online and you’ll hear from us soon.