84 month auto loans the norm in Canada

Wonder what the average loan is in the USA? Peace. D
https://jalopnik.com/more-than-half...ite&utm_source=jalopnik_copy&utm_campaign=top

 

72
Months? Or 60?

 

Used to be the norm was 36. I just googled it and according to Edmunds now it’s 72 with 84 creeping up.

 

I would do a 30 year loan on the new 2019 Bugatti Chiron @ $5.8Mil before tax and all



http://amp.timeinc.net/thedrive/new...e-extreme-chiron-to-geneva-in-2019?source=dam

 

Just noticed there is no kiss all over emoji here for a German masterpiece like this...

 

So, I guessed that the 360 month payments doesn’t scare you

 

This household is zero months and has been for 6 years LMAO.
We don’t buy brand new though, so I don’t get to experience that “breaking in the back-seat” like some do.
If we get really lucky, they may still have a new-car smell to them
(I guess that’s if prior owner chose not to break in backseat)

 

I will never do over 48 even if it's a 60 mo loan. I always pay off early.

My 2016 will be paid for after Christmas even though it was a 48mo loan. Will feel good.

 

I’ve bought two new vehicles in the last year and a half. Both dealerships were defaulting to 72 months to begin with. Either it’s because that’s what is normal for them, or they wanted to collect more interest. I had to tell them both to drop it to 60.

 

a wise person told me once.. (father in law)
if you can't afford pay cash, you can't afford it..
I've lived my life by this rule.
something to consider.. always set your budget for the worst of times... never the best.
if you must finance an auto set your payment for as low as possible like the 84 mo. term, make 2 payments & payoff in 48.
if you fall on lean times you will be glad for the lower single payment option.

..Slayer

 

I will happily take the longest available term they're willing to offer at 0%; barring that, 36mo is about as long as I'd want for a car loan.

 

5 years ago, the norm was definitely 60 months. Now, the big three's main finance companies tend to offer 84 months as a default. It won't be too long when the auto loan bubble bursts...

 

And with 0 down and no trade in, there will be many folks very upside-down in half of that term.......

 

This, as long as the Interest rate is low and you were wise in your purchase I don't see it as a huge deal to stretch your money out. Why tie up money you have that you could use elsewhere like investing it. Your taking money to pay off a depreciating asset that you could be using somewhere else to make more then you would be saving by paying it off early. Again this only applies if your rate is low, I wouldn't do this with a high interest rate.

 

From my seat 84m is sadly all to often used. It isn't something pushed by the dealership, its what people request to have. Speaking from the Canadian side of the border and for our specific franchised dealership anyway.
Our only job is to show the payments and explain them. I even like to stress how much interest is charged when these terms go to full term. People just don't care for what seems to be the most part. Many factors I'm sure play into these choices, but fiscal responsibility is not used often enough by purchasers.

While I strongly do not encourage such lengthy terms on something that depreciates the moment you sign the paper work, we are not the moral authority to dissuade those who prefer or ask for the long term finance options. Just hope it doesn't all come crashing down for those folks.

 

Exactly!!!
My only exception is real estate and land, which generally does not depreciate like most other items purchased in the game of life
Our only debt is home loans, which does bother me to owe the bank money. Tons of equity, but they’re still stealing my cash via interest.

 

Gotta say, as much as I would love a 3rd gen, I'm loving not having $600+ per month in payments. I bought my 05 for 15k using my line of credit and paid it off within a year. Its very liberating, especially now that work has slowed to a crawl and hours are dropping to the point my take home is about 1k less per month than it was 3 months ago. Guys I work with are stressing out and I'm going "holy shit...I can have a life for a bit".

That said, we financed The Woman's car (15k) and it was over 60 months just to free up some cash. It'll be paid off within 18 months max.

 

I had auto loans throughout my late teens/20's - but I would do a 48 mo (on say a $15K rig), and after that 48 mo was up and rig was paid off - I'd drive it for 2 or 3 more years, but keep sticking the same monthly payment into the bank. Then after going through multiple rigs over the years - you can drop down to do a 24mo or 12mo loan. You then get to a point where you can sell your rig and pay cash for another. Even after cash purchases, I still stick the funds into an account specifically for autos. The last 4 cars were paid in cash, and we are still just funneling money into an account for when we upgrade in 3-5 years (usually do every 5 years since we pay sales tax in WA - doesn't make sense to purchase a $30K vehicle every other year and pay $3K in taxes). I still refuse to purchase brand new though for certain models LOL. The ones that for certain hold their value like crazy (4runner) does not make sense to purchase slightly used, when new is nearly the same price.
If you have the option for a zero percent for 5 years, awesome - do it. Buy a 2019 Tundy - pay that baby off, drive for 3 more years and sock the same payment away. Then after 8 years you have a $25,000 truck and $18,000 saved for a down. Next loan will be very minimal, if at all.
That's my opinion on how to do it. LOL

I think the problem is, everyone wants a new car these days! (who doesn't right?) And nobody pays attention to the depreciation rate that vehicles take a hit on.
They are always trying to dig-out of negative equity.
Which is why all of us smart-minded folks drive Toyota's that hold their value right? LOL

 

How many times can I like this??

 

Seems like banks will loan to anyone with a pulse nowadays

 

Say what?

 

Seems like they don’t actually care what you debt to income ratio would be, they will just extend the loans out. Scary

 

Actually with the super high cost of trucks nearing 70K it has more to do with keeping payments under $1200

 

Not sure where you get the cash from in your mid 20s after graduating college (that you paid for in cash) and starting your career, or if no college trying to move up the ladder, to get married, purchase a house, purchase a safe vehicle or two, have kids, etc.

I opened a mortgage on my house after getting tired of paying increasing rent on apartments. I got a 3% rate and the value of my house has jumped $70k after the first 5 years. That jump is more than the interest I've paid.

Not knocking on your pholosohpy, but I've seen that said or quoted all yhe time and it doesn't actually make sense when you look at the big picture.