How to Choose a Finance Term

One of the most important decisions you’ll make in your life is buying a new vehicle. For most people, buying a brand-new vehicle outright is simply not practical. Instead, most new vehicle buyers will be securing a car loan in order to make the purchase. This is why you’ll want to consider how much you can afford, and what kind of interest you’ll be paying, before you sign on the dotted line. Read on with the finance experts here at Downtown Auto Group as we walk you through a few things to consider when you’re choosing between long, and short term financing.

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Monthly Payments

One of the biggest things affected by your choice of a long or short term loan is the monthly payment. Generally speaking, if your finances are tight, you might consider a longer term loan as they tend to have lower monthly payments. Short term loans tend to have a higher monthly payment, but you’ll end up paying less in interest and you’ll pay off the vehicle faster.

Interest Rates

Speaking of interest, different loans, and even various financial institutions, may offer unique interest rates, especially if you have non-existent or bad credit. When you’re exploring your financing options, you should take a minute to discuss the interest rate with the financial expert you’re working with, and make sure you understand it.

Vehicle Depreciation

Your vehicle depreciated in value the second you drove it off the lot for the first time. With longer-term loans, you may end up still owing more than the vehicle is worth after several years of payments. Short term loans cost more month-to-month, but may leave you in a better position to trade-in or sell your vehicle after it’s paid off.

Finance Your Next Vehicle With Downtown Auto Group

We pride ourselves on having a team of courteous, transparent, and professional financial advisors, who can help you secure the best possible loan from an institution you trust. Visit our Autoplex or contact our finance team, today, to get pre-approved. We can even work with you to find options if you have bad, or no existing credit score. When the time comes to buy your next car, the Downtown Auto Group in Toronto, ON, is your destination of choice!