96 Month Car Loans In Ontario: Get Long-Term Financing Today
96 Month Car Loans In Ontario: Get Long-Term Financing Today
Posted on January 31, 2023
We are increasingly seeing applications for 84 or 96-month car loans. As the price of new cars rises, so does the amount we need to borrow to pay for them. Rather than pay more per month and make them difficult to afford, we can take them over a longer term.
But are such long terms a good idea? Are 96 month car loans viable? Our auto loan team finds out.
Why Are We Seeing 96-Month Car Loans?
We alluded to the reason in the introduction. The rising price of new cars means either not buying them, paying more per month, or paying the loan over a longer term to spread payments.
The latter option is the most practical, which is why we’re seeing a rise in longer-term auto loans.
Are 96-Month Car Loans Viable?
96-month auto loans are viable as long as you realize what’s involved. For that, we’ll use our usual list of pros and cons.
Pros of 96-Month Car Loans
You can borrow more: The main reason for considering 96-month auto loans is so you can borrow more to buy a newer or better car. The alternative is to pay more per month which isn’t always sustainable.
More affordable per month: The other side of borrowing more is keeping things affordable. Longer auto loans give you more options in terms of borrowing and maintaining your monthly outgoings.
Can buy hybrids or electrics: As new hybrid vehicles and electric cars are expensive right now, a longer auto loan makes them more accessible.
Cons of 96-Month Car Loans
More interest over the term: As interest is paid annually, the longer you have the loan, the more interest you’ll pay. Even if the rate is lower, you’ll be paying it for longer so the loan will be more expensive over the term.
Depreciation and negative equity: Negative equity is inevitable on all loans for new cars but you’ll be upside down longer in a 96-month auto loan than for a shorter one. If you’re keeping the car, it shouldn’t be an issue. If you plan on selling it in a year or two, it may become an issue.
A lot changes in 7-8 years: A lot can change in 96 months. Your life, job, family, financial situation, cars, technology, society and everything around you could all be unrecognizable by the time you pay off your loan.
Alternatives to 96-Month Auto Loans
If you don’t like the idea of 96-month auto loans, your alternatives are limited. You can buy a used version of the car or buy something cheaper. Depending on your situation and the car in question, one may be more palatable than the other.
Both require a compromise of some kind but they do mean borrowing less or over a shorter term. At the end of the day, you have to make the right decision for your personal situation.
If you're ready for a car loan, we'd love to help with that! simply fill in the form below to get started.