If you’re in the market for a new car in Ontario, you may have heard about the option of getting a 96-month car loan. Yes, you read that right – 96 months. That’s a whopping eight years of monthly payments toward your car.
But before you jump at the idea of having lower monthly payments, it’s important to understand what a 96-month car loan really means and if it’s the right choice for you.
Pros of 96 Month Car Loans
Firstly, let’s talk about the pros of a 96-month car loan. The biggest advantage is the lower monthly payments. Since the loan term is spread out over such a long period of time, your monthly payments will be significantly lower than they would be with a traditional four or five-year loan.
This can be a huge relief for people who want a brand new car but may not have the budget for higher monthly payments.
Another advantage is the ability to buy a more expensive car. With lower monthly payments, you may be able to afford a car with more features or a higher price tag than you would have been able to with a shorter loan term.
Cons of 96 Month Car Loans
However, it’s important to consider the cons of a 96-month car loan as well. The biggest disadvantage is the overall cost of the loan. Even though your monthly payments are lower, you’ll end up paying more in interest over the life of the loan.
In fact, a 96-month car loan could end up costing you thousands of dollars more than a traditional loan.
Another issue to consider is the depreciation of the car. Cars depreciate in value quickly, and with a 96-month car loan, you’ll be paying off your car long after it’s worth less than what you owe on it. This could put you in a difficult financial situation if you want to sell the car before the loan is paid off.
Your Needs in 8 Years
It’s also important to consider your future plans. Eight years is a long time, and a lot can change in your life during that time. Will you still need the same car in eight years?
Will your financial situation change? It’s difficult to predict the future, so it’s important to think about the long-term implications of a 96-month car loan.
In Ontario, the Financial Services Regulatory Authority (FSRA) regulates car loans, including 96-month car loans. They require lenders to disclose all fees and charges associated with the loan, including the total cost of borrowing. It’s important to review this information carefully before signing any loan documents.
Ultimately, the decision to get a 96-month car loan in Ontario is a personal one. It’s important to weigh the pros and cons and consider your own financial situation and future plans. If you decide to go for it, make sure to review all loan documents carefully and work with a reputable lender.
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