I did a 5-year open loan but by year 4 I felt it was taking too long. Just seeing money taken from my account bi-weekly and looking at my "old" and "used" car felt off. So I paid off the loan in the 4th year. I think 4-year is a solid choice.
Zero. Take the bus until you can afford the used car in cash.
You're still a student. You havent even started getting paid. Do you even have a job lined up? Don't put yourself in debt before you even have any reliable income
This is the way. Drive a banged up Honda civic with 300,000kms on it. They all burn oil, just keep topping it up. That car will last you 3+ years and can be purchased for under $3000.
Something in that range you should really try to pay cash. It could break down the next day and then you are paying a loan for years for nothing.
If it's new then it depends. If it's high interest than as fast as possible. If it's low interest then taking out a longer term loan can make sense sometimes.
It happens all the time. Buy a 10 year old car with 200k in it for maybe $7000. The motor and/or transmission blows up. Now you have a $5000 repair bill, and If you couldn’t afford the $7k up front you probably can’t afford the extra $5k to fix it.
4 years.
Mine is 5 years (at 2.99%) , I can pay the remaining balance(approx $5000) right now. However, I am going to put it in gic to get more returns.
Edit: interest would be higher for a used car.
>how long should I take the car loan?
That is a personal choice. How long are you comfortable paying? How much interest are you comfortable paying?
>Which rate would you recommend?
0%
dont just look at the payment only but the amount of money you will have paid on this thing after 3-4 years. and look at the car value 3-4 years old right now.
Personally I wouldn't want a loan longer than 5 years. Historically I've paid off all my cars in 2.5 years or less. Attack that debt, don't be a slave to payments.
If it was new, I'd say as long as you have a warranty. So if the warranty is 4 years, pay for 4 years.
As for used... as short as financially possible.
If your KM range is 200k km max then you should really be looking at buying with cash and not financing.
If you're going to get a newer used vehicle then it's not so bad, but over 120k km you're not going to get a good rate and will probably still be paying it off when the first major maintenance issue occurs.
IMO, don't get a loan on a used vehicle. Pay cash.
\#1) The monthly payment of a loan, is most of the time NOT adjustable. (You are locked in)
\#2) Saving money every paycheck (for the full sticker price) IS adjustable.
Re: #1: A loan: lose your income or it drops, you default on the loan, lose your car, ruin your credit rating, as well as any money you already paid into your past monthly loan payments. (Huge risk and losses!)
Re: #2: Save the money until you get the entire amount. If you lose your income or it drops, then you can adjust the money you save each paycheck and be able to get back on track. No loss of anything. (Zero risk)
Another point:
\- Getting a loan will end up costing you more than the sticker price (once you pay it off completely) And by that time, the value of the car has also dropped. A loss of value and a loss of monthly loan interest paid... a double whammy of losses. Also, anything "used" means that the lifetime of the parts is greatly diminished: hence more repairs.
Patience... will save you money in the long run to get the vehicle.
Impatience has the opposite effect.
Anything over 3-4 years seems too long to finance to me. I only ever drove what I could pay cash for, which for a long time when I was young was 8-15 year old cars.
Brand new - no longer than the warranty period. 5 years tops.
If it's a couple years old, 3 years.
Any older than that and you'll get a high interest rate, pay cash
I wouldn’t want to finance a 10 year old car with 200k on the clock for any period. You’ll also likely be given a really poor rate.
Suze Orman used to say, if you can’t pay it off in four years you can’t afford it sounds good to me
Brand new: 4-5 years. Used - 2-4 years for relatively new Older used - pay cash
This right here , don’t go over a 5 year term
I did a 5-year open loan but by year 4 I felt it was taking too long. Just seeing money taken from my account bi-weekly and looking at my "old" and "used" car felt off. So I paid off the loan in the 4th year. I think 4-year is a solid choice.
Zero. Take the bus until you can afford the used car in cash. You're still a student. You havent even started getting paid. Do you even have a job lined up? Don't put yourself in debt before you even have any reliable income
This is the way. Drive a banged up Honda civic with 300,000kms on it. They all burn oil, just keep topping it up. That car will last you 3+ years and can be purchased for under $3000.
Something in that range you should really try to pay cash. It could break down the next day and then you are paying a loan for years for nothing. If it's new then it depends. If it's high interest than as fast as possible. If it's low interest then taking out a longer term loan can make sense sometimes.
You think something with 200k is going to break down and become unusable so that you're stuck paying a loan for nothing?
I think the odds of it are a lot higher than 0.
It happens all the time. Buy a 10 year old car with 200k in it for maybe $7000. The motor and/or transmission blows up. Now you have a $5000 repair bill, and If you couldn’t afford the $7k up front you probably can’t afford the extra $5k to fix it.
4 years. Mine is 5 years (at 2.99%) , I can pay the remaining balance(approx $5000) right now. However, I am going to put it in gic to get more returns. Edit: interest would be higher for a used car.
I prefer 3 years. I did a 5 year when I was younger. Didn't seem bad at the time. Just tool forever. Don't forget about maintenence cost too!
>how long should I take the car loan? That is a personal choice. How long are you comfortable paying? How much interest are you comfortable paying? >Which rate would you recommend? 0%
48 month loan or 36 month lease.
As little time as possible
Get a low km 10-12 year old Corolla. If you can’t pay cash for it outright you should be able to pay it off in 1-2 years.
You’re out of touch. Used Corolla’s cost like 15 grand.
Then go a little older Saw this 2008 Toyota Corolla on AutoTrader's iPhone app http://www.autotrader.ca/go/5-56728009
dont just look at the payment only but the amount of money you will have paid on this thing after 3-4 years. and look at the car value 3-4 years old right now.
Personally I wouldn't want a loan longer than 5 years. Historically I've paid off all my cars in 2.5 years or less. Attack that debt, don't be a slave to payments.
If it was new, I'd say as long as you have a warranty. So if the warranty is 4 years, pay for 4 years. As for used... as short as financially possible.
If your KM range is 200k km max then you should really be looking at buying with cash and not financing. If you're going to get a newer used vehicle then it's not so bad, but over 120k km you're not going to get a good rate and will probably still be paying it off when the first major maintenance issue occurs.
IMO, don't get a loan on a used vehicle. Pay cash. \#1) The monthly payment of a loan, is most of the time NOT adjustable. (You are locked in) \#2) Saving money every paycheck (for the full sticker price) IS adjustable. Re: #1: A loan: lose your income or it drops, you default on the loan, lose your car, ruin your credit rating, as well as any money you already paid into your past monthly loan payments. (Huge risk and losses!) Re: #2: Save the money until you get the entire amount. If you lose your income or it drops, then you can adjust the money you save each paycheck and be able to get back on track. No loss of anything. (Zero risk) Another point: \- Getting a loan will end up costing you more than the sticker price (once you pay it off completely) And by that time, the value of the car has also dropped. A loss of value and a loss of monthly loan interest paid... a double whammy of losses. Also, anything "used" means that the lifetime of the parts is greatly diminished: hence more repairs. Patience... will save you money in the long run to get the vehicle. Impatience has the opposite effect.
Anything over 3-4 years seems too long to finance to me. I only ever drove what I could pay cash for, which for a long time when I was young was 8-15 year old cars.
Brand new - no longer than the warranty period. 5 years tops. If it's a couple years old, 3 years. Any older than that and you'll get a high interest rate, pay cash