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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?

avatar
Johnny Puckett · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“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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