long term car loans in ontario canada

84 Month Car Loans in Canada: Good Idea or Big Mistake?

Posted by on Feb 20, 2024 - Archived under Uncategorized

The 84 month auto loan is a relatively new phenomenon introduced to help people afford the higher prices of new cars and offer flexibility in how they pay the loan back. But are they a good idea?


We asked our auto loans team to outline the pros and cons of 84 month car loans in Canada as they have the most experience with them.

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84 months is 7 years. A long time in car years and a long time to service a single loan. There are definite upsides as well as downsides to having one though.


Pros of 84 Month Car Loans

Can borrow more while retaining sensible monthly payments: The more you borrow, the higher the payments. If you want to treat yourself or borrow a little extra, this is how to do it.


Can afford a newer or better car: Leading on from that, borrowing more means you can afford a brand new car, higher spec car, or something nicer.


Builds credit for longer: The more monthly payments you make, the more positive hits on your credit report you’ll get. Make every payment on time over the entire loan and your credit score will thank you for it.


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Can prioritize lower payments: If you need to minimize payments to keep things affordable, you can also extend a standard loan over a longer term.


Cons of 84 Month Car Loans

Higher cost over the term of the loan: You’re paying interest for a lot longer, which typically means the overall cost of interest will be higher than a shorter loan.


Potential for longer period of negative equity: If you’re buying a new car, the depreciation will be absorbed by the down payment but also the loan payments. Lower payments mean the potential of being upside down for longer.


Warranty will have expired by the time it’s paid off: New car warranties are typically 3 years with some automakers offering longer. Either way, the warranty will have expired by the time the car is paid for.


Car will be old by the time it’s fully yours: 7 years is a long time in car years and a lot will have changed in that time. Your car will technically be regarded as old by the time it’s paid off.


There are distinct benefits to 84-month car loans in Canada but you also need to take into account the potential downsides. Longer loans are cheaper on a monthly basis but more expensive over the term.


You can afford to buy a nicer car but it will be much older by the time it’s fully paid off. The monthly burden of the loan can be lower but it will be with you for much longer than usual.


It’s a balancing act and one only you can decide whether it works for you or not.


When you need help securing an auto loan of any length, we can help.


If you’re ready for an 84-month car loan, we’d love to help! simply click here to get pre-approved online today.

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