"Should I take out a longer loan on a $30,000 car for smaller monthly payments? "

"I was talking to the dealership about auto financing options for a $30,000 car. The salesman said he can get me approved for a 60-month loan at $560 per month or a 72-month loan at $470 per month. The interest rate is the same at 1.75%.

I could use some extra money each month to pay down some of my other debt, but I know it will cost me more in the long run. Should I go with the shorter loan or the longer one?

"

Answer
“With these loan options, the difference in the amount that each will cost you in the end will be negligible, about $300. So you really shouldn’t worry about that.
However, the longer the loan is, the more of a risk you face of being upside-down on the car, and that could be a big problem depending on how well your vehicle retains its value. In the end, it is up to you, and either way you are getting a good deal on financing. “
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Johnny Puckett
Answered on May 11, 2021
Johnny Puckett is a freelance writer and automotive expert. He has contributed content to a number of some of the largest online publications, aftermarket automotive manufacturers’ sites, and automotive informational sites. His experience in the automotive and information fields informs his writing at Jerry. His automotive interests bleed into his free time, where he enjoys modifying his favorite cars and woodworking.
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