Rising prices have all of us looking for ways to economize, and it also means more of us are considering 72-month Subaru financing when shopping for a new car or SUV. There are many factors to consider when choosing a loan term, and our team at Heritage Subaru Owings Mills will help to walk you through the process. Here’s a closer look at some of the benefits and drawbacks of longer-duration car loans.
What to Consider When You’re Weighing Loan Terms
When financing a vehicle, there are several different factors that determine how much you will spend, some of which hide longer-term costs. Your down payment is your first consideration, and while you may finance the same amount for 36 or 72 months, the outcomes are different. You’ll pay more per month on a shorter loan term, but you’ll pay less interest. There are two reasons for this: one, you’re paying interest for longer. Two, longer loan terms are often perceived as higher-risk by lenders, resulting in higher interest rates.
That’s not all. Longer term lengths increase the risk of being “underwater” or “upside down” on the loan, meaning that at some point you’ll owe more on the car than it is worth, cutting into resale or trade-in values.
Are There Benefits to Longer Term Lengths
While it’s always important to be informed of drawbacks, there are certainly benefits to longer term lengths like 72 months. To start, you will have smaller monthly payments. That means more vehicles will be available to suit your monthly budget, and you can drive home in a vehicle you really love. With the extra money in your pocket from smaller monthly costs, you’ll have extra on hand for fuel and maintenance costs, or even if you want to make customizations that suit your lifestyle and driving needs.
Begin the Subaru Financing Journey in Owings Mills, MD
The Subaru financing process doesn’t have to feel overwhelming. With tools, resources, and information you can rely on, Heritage Subaru Owings Mills is here to guide you along the way. Visit today to browse our inventory and get answers to your Subaru lease and finance questions.
