Tuesday, October 30, 2007

Long-term Loan Buyer..Is It a Good Idea?

Lots of new car buyers prefer to pay off their loan in two or three years instead of the more usual 5. Well, but it's a new tendency among more disciplined and practical customers to pay the car loan off earlier. Why? Market researches say thet in this way, customers will have paid off their car before they decide to resell it. And people do resale. Besides, such customers do have the money to make larger monthly payments.
Well, I took out a 5-year loan on my Toyota and I even thought that maybe I would extend the payment period. Thus, I will pay considerably less every month but will have much more months to go. In the end I will repay a larger amount.
Tha's where the problem lies. They say that a longer term loan is good for buyers expecting to drive their vehichle for quite a long time - much more than just 6 years - or for cars that don't lose their value. Because otherwise the whole deal would be a failure.
I couldn't say that my Toyota is something exclusive, the car for live. I definitely plan to resell it in maybe 3 or 4 years. It happens the loan will outlive the car?
Did I miscalculate? I got insomnia with the question.

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