Why should I choose a 36-month car loan?

If choosing a longer loan makes my monthly payments small and saves me money, why would I choose a 36-month car loan?

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Johnny Puckett
Answered on Jul 07, 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.
“Buying a car is a long-term investment, so you have to think about your long term finances instead of just month-to-month finances.
Let’s say you finance a $22k car at 6% interest for 72-months. Your payments will be $364 and in the end you will pay $4,251 in interest.
However, on a 36-month loan, that interest amount goes down to just $2,094.
If you decide to sell the car three years into owning it, your $22k car will be worth somewhere in the ballpark of $13k. If you financed the car for three years, all of that $13k is yours. However, if you still have three more years to go on the loan, you are only left with about $3k.
While in this scenario you are not upside down, you still left $10k on the table.”
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