Get Long-Term Used Car Loans

If you’re looking for a used vehicle with an auto loan rate that won’t cost you an arm and a leg to pay each month, you may have been recommended a long-term used car loan. There’s no doubt that a 72-month (6 years) or 84-month (7 years) loan would help stretch out those payments, but essentially, this type of loan can often work against you.

Since long-term used auto loans are looked down upon, why is it something you might consider? And if you would consider it, how can you get your hands on one without getting burned by high interest rates? Here are a few tips to think about …

Think about How Much You Want to Pay Overall

It’s very easy to buy an expensive car that you really can’t afford because you’re enticed by the monthly payments, but if you’re making economy car money, you might not want to purchase a luxury vehicle because the dealer says he can work you into “comfortable” monthly payments. In other words, it’s better to think of long-term financing as a way to make already affordable payments lower, and non-affordable payments affordable.

Run Through a Vehicle Checklist

If you’re considering a long-term used car loan, there are some items you want to make sure you can check off a “Don’t Get Burned” list.

• Make sure you can pay for repairs long-term. It’s pretty easy to think of making payments on a car when you have a warranty and don’t have to think about repairs, but when the warranty expires, those repairs are going to fall on you. So if you’re buying a used car, you want to make sure you secure low enough payments to set aside money for car breakdowns and other expenses.
• Make sure the car is reliable. When buying a used car, you are already working against time before it will need some major repairs. It’s for this reason that you want to make sure your vehicle is one that ranks high for reliability.
• Make sure the car has a high resale value. If you decide that you want to sell your car before the loan period ends, you may find that with a long-term loan you owe more than the car is worth. To avoid this “upside down” loan, it’s good to find a vehicle that has a high resale value.

It’s not always a bad thing to take out a long-term used car loan. In fact, if you know how to manage it, you can completely avoid getting burned.