Which Car Financing Term Should You Choose?
You’ve done the handshake and you’ve signed the sales agreement. You’re going to be the proud owner of a new Acura! It’s an absolutely thrilling feeling, but the day isn’t over yet. Once you’ve agreed on the pricing, you need to select the car financing term that works for you. But that’s easier said than done.
There are always many options to choose for car financing terms. But how do you know which one is best? Here are a few things to consider when you’re choosing the car financing term that works for your needs.
Considerations for Car Financing Terms
How Much Can You Afford?
As always, it comes down to how much you can pay on a regular basis. If you have the income to support it, it’s always best to choose the shortest term possible for your car financing terms – within reason, that is. If the interest rate is 0 percent or close to it, you might want to take the longest term with a low rate. That way, your payment is easy without costing you in interest charges.
Do You Have a Down Payment?
If you have a down payment, helps lower the overall cost of borrowing. It can also make it more comfortable to finance your new Acura over a shorter period of time. Wouldn’t it be nice to pay off your new car sooner than later?
Is the Interest Rate Subvented?
If you qualify for the best interest rates, it’s an easy choice to pick the longer car financing terms. But if there are cash rebates available and you have a down payment, it might make sense to pick a higher bank interest rate instead. The overall loan amount paid is lower in the end sometimes.
Is the Car Loan Open or Closed?
You might want to take a loan with low payments initially, but you plan to pay it off before the end of the loan comes up. If that’s the case, you want to select an open loan. That gives you the ability to pay the loan off whenever you’re able, not stuck paying interest unnecessarily until the loan matures.
Everyone’s financial situation is different, and the financing professionals at Jay Wolfe Acura understand. We’ll help you choose the best car financing term for your needs.