What is best financing rate now?

[Slumpey326]

I would think 84 month would make sense if the rate was very low. I am trying to find any other credit unions with low 84 month rates.

Anyone have any luck besides lightstream that has easy membership guidelines.

 

[willa1975]

Where are you seeing anyone getting a rate like that on an 84 month loan?

A couple of credit unions with very specific membership criteria are offering pretty good 60 and 72 month rates but rates overall have gone up quite a bit in the last 60 days and continue to go up.

84 month loan on a car is a bit crazy anyway. I can’t think of any reason anyone should even consider it unless the loan was absurdly low (under 2%).

84 month loan is perfect recipe for being quite upside down unless you made a substantial down payment.

Agree.

I think that, if one needs seven years to pay off a car loan, they should wait until they have saved a larger down payment or look at a less expensive car.

Furthermore, under a best-case scenario, one is looking at three years of payments on a vehicle out of warranty.

 

[voip-ninja]

I would think 84 month would make sense if the rate was very low. I am trying to find any other credit unions with low 84 month rates.

Anyone have any luck besides lightstream that has easy membership guidelines.

Allegacy and Everence are the only two I am aware of that are open to anyone willing to make a small donation.

Not sure what rate they offer for 84 months or if they even do make auto loans that long.

Again, unless the rate is so low you can beat it with a CD I don’t see the point of an 84 month loan.

Perfect recipe for trading the car in 4 or 5 years and finding out you owe thousands more than the trade in value.

 

[Slumpey326]

I just got 3.09% for 84 months from Allegacy (based in NC). I live in Texas.

Have to become a member (takes 5 mins and $20 online) to apply for a loan.

I applied by phone (took 10 mins) and got a call less than 24 hrs later with approval.

10% down required.

Haven't gotten a car loan in ages but this was unbelievably easy.

I just tried them up and they said they don’t finance Tesla’s. I am hoping she is wrong. If you are out of state how were you eligible for the credit union

 

[Randy7fx]

Not sure what rate they offer for 84 months or if they even do make auto loans that long.

Again, unless the rate is so low you can beat it with a CD I don’t see the point of an 84 month loan.

Perfect recipe for trading the car in 4 or 5 years and finding out you owe thousands more than the trade in value.

If one can get a 1.99% rate for 84 months, and there is no penalty to pay it down, does it not make sense to pay it like it is a 60 or 72 month loan, and still have the flexibility of going 84 months? Particularly since the cost of borrowing money is 1.99%?

 

[willa1975]

If one can get a 1.99% rate for 84 months, and there is no penalty to pay it down, does it not make sense to pay it like it is a 60 or 72 month loan, and still have the flexibility of going 84 months? Particularly since the cost of borrowing money is 1.99%?

If that’s the lowest rate they offer, it makes sense.

Rates usually rise for terms over 60 months.

 

[voip-ninja]

If one can get a 1.99% rate for 84 months, and there is no penalty to pay it down, does it not make sense to pay it like it is a 60 or 72 month loan, and still have the flexibility of going 84 months? Particularly since the cost of borrowing money is 1.99%?

Maybe.

If you need the flexibility of possibly needing to resort to the lower payment it is still an indicator you should consider a less expensive car.

I’m not a financial advisor I can only relate what has worked for me.

If I got some absurd rate like 1.49% and it was only offered for an extended term I would take it and just invest my money.

This might sound harsh but these days into middle age I shy away from loans on depreciating assets in general and only take a note if I could pay it off immediately if I had to.

If I lived above my means for years I would not be in a position to do that.

 

[whatthe2]

Agree.

I think that, if one needs seven years to pay off a car loan, they should wait until they have saved a larger down payment or look at a less expensive car.

Furthermore, under a best-case scenario, one is looking at three years of payments on a vehicle out of warranty.

Or, maybe some people are just smart with their money. I could pay cash for the car, but at 2% or 3% loan why would I? I can put my money into something that make way more than 3%. I can put it in the stock market and make 10% or buy another rental property (down payment) and get 15-20%. Just because people choose to leverage other people's money, doesn't mean they should get a less expensive car.

 

[voip-ninja]

Or, maybe some people are just smart with their money. I could pay cash for the car, but at 2% or 3% loan why would I? I can put my money into something that make way more than 3%. I can put it in the stock market and make 10% or buy another rental property (down payment) and get 15-20%. Just because people choose to leverage other people's money, doesn't mean they should get a less expensive car.

What percentage of people getting 84 month loan are doing what you describe?

1%?

The overwhelming majority of people getting those crazy long auto loans are doing so because it’s the only way to budget payments on a “too expensive” auto purchase. On the other hand cars are more reliable now and if you keep it 10 years (most don’t).....

I do invest quite a bit of my earnings but 10. % return is by no means assured.

People should do what they want. The comment “I can fall back on the lower payment if necessary” is kind of a clue that maybe more payment is being bitten off than someone can afford.

Then again if the bank loans the $$ it’s their problem not mine unless they need a bailout to avoid melting down. Oh wait...

Caveat Emptor.

 

[whatthe2]

What percentage of people getting 84 month loan are doing what you describe?

1%

I do invest quite a bit of my earnings but 10. % return is by no means assured.

People should do what they want. The comment “I can fall back on the lower payment if necessary” is kind of a clue that maybe more payment is being bitten off than someone can afford.

Then again if the bank loans the $$.

Caveat Emptor.

Fair enough. I'm sure you are probably right, most people are thinking of getting the payment as low as possible. I would hope it's higher than 1% of people thinking this way, but who knows in this day and age.

 

[preilly44]

I just tried them up and they said they don’t finance Tesla’s. I am hoping she is wrong. If you are out of state how were you eligible for the credit union

I am working with Paula and she said they do loans for Teslas but you need a min of 10% down.

 

[willa1975]

Or, maybe some people are just smart with their money. I could pay cash for the car, but at 2% or 3% loan why would I? I can put my money into something that make way more than 3%. I can put it in the stock market and make 10% or buy another rental property (down payment) and get 15-20%. Just because people choose to leverage other people's money, doesn't mean they should get a less expensive car.

The difference in monthly payment on a 72- or 84-month loan versus a 48- or 60-month loan is not going to amount to the down payment for a rental property. And the 2-3 additional years of car payments will more than negate the savings from the cheaper monthly payment.

But it’s your money, do what works for you.

 

[whatthe2]

The difference in monthly payment on a 72- or 84-month loan versus a 48- or 60-month loan is not going to amount to the down payment for a rental property. And the 2-3 additional years of car payments will more than negate the savings from the cheaper monthly payment.

But it’s your money, do what works for you.

Understood, and certainly not trying to start any Internet arguments, just pointing out the fact that using someone else's money isn't always a bad idea and that people having different strategies doesn't mean they can't afford the car. That's all.

 

[willa1975]

Understood, and certainly not trying to start any Internet arguments, just pointing out the fact that using someone else's money isn't always a bad idea and that people having different strategies doesn't mean they can't afford the car. That's all.

I think that strategy makes more sense on longer-term investments like mortgages and student loans.

The $150 or so a month that I might save on my car payment with a longer-term loan, in my opinion, isn’t worth having to budget for a car payment AND repair bills once the car is out of warranty.

That being said, I would opt for the longer term if the APR was the same or better simply to have the option of a lower payment. But, in my experience, rates rise considerably for terms over 60 months.

 

[whatthe2]

I think that strategy makes more sense on longer-term investments like mortgages and student loans.

The $150 or so a month that I might save on my car payment with a longer-term loan, in my opinion, isn’t worth having to budget for a car payment AND repair bills once the car is out of warranty.

That being said, I would opt for the longer term if the APR was the same or better simply to have the option of a lower payment. But, in my experience, rates rise considerably for terms over 60 months.

We are getting off on a tangent here, but it's a good discussion, so I'll add one more thing. I don't think it matters what type of loan it is - a loan is a loan. If I can take that money I would have put into the car and instead put it into another investment that generates more return than the interest I'm paying, I'm usually better off doing it. So even at 1% or 2% more on a longer term loan, I can still make up way more than that on investing my money in something other than a depreciating asset.

But you bring up a good point about being out of warranty and repair bills, so there is something to be said for that.

As @voip-ninja mentioned, I'm sure most people are looking at a longer term loan simply from the standpoint of lowering their monthly nut.

Anyway, good points.

 

[Randy7fx]

But you bring up a good point about being out of warranty and repair bills, so there is something to be said for that.

.

How does being out of warranty or repair bills factor into the equation from the perspective of the loan? It should absolutely be a consideration in terms of how long one plans to own the car, but out of warranty repair bills are the same regardless of length of loan. I get it if you are saying one needs to factor in/budget for those post warranty, but not sure it is a variable in deciding length of loan.

 

[whatthe2]

How does being out of warranty or repair bills factor into the equation from the perspective of the loan? It should absolutely be a consideration in terms of how long one plans to own the car, but out of warranty repair bills are the same regardless of length of loan. I get it if you are saying one needs to factor in/budget for those post warranty, but not sure it is a variable in deciding length of loan.

Yeah, not really a deciding factor in loan length if you are looking at it from an ROI perspective on your money, but certainly from a budgeting standpoint if you have huge repair bills out of warranty. I think that factors somewhat into the decision as well. I think the point was that there's a bit more to consider in that scenario. I still favor using someone else's money for as long as I can and I generally don't keep cars that long anyway.

 

[Slumpey326]

Can the $2500 payment that I had to pay when I ordered the model 3 on Tesla website be used towards the 10% needed to finance with Allegacy?

 

[whatthe2]

Can the $2500 payment that I had to pay when I ordered the model 3 on Tesla website be used towards the 10% needed to finance with Allegacy?

I don't see why it wouldn't. Any money put down toward the purchase should be credited as a down payment.

 

[Chak]

Just finalized auto loan with DCU for 65 months, 2.49%. Delivery scheduled for 9/6