How many years should a new car loan be?

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When deciding to buy a new car, how many years should you choose to finance for the best impact on your wallet and peace of mind?

Most people tend to choose financing options when buying a new car because it's inconvenient to pay the full amount upfront, resulting in long-term debt. But what is the ideal duration for financing to ensure it’s most suitable?

When choosing the repayment period for a car loan, it depends on each person's financial situation—whether one prefers to pay higher installments over a shorter term or lower installments over a longer term. However, Motorist recommends that the best duration is to finance for no more than 5 years, or 60 months.

If you choose to finance for a term longer than 6 years, most finance companies will charge a higher interest rate than usual. Although the monthly payments may seem lower, when you add up the total interest, the overall amount paid will be significantly higher than if you had financed over 5 years.

Therefore, when deciding to purchase a new car, it’s important to consider everything carefully, such as your budget, the necessity of having a car, the interest rates for car loans, and comparing promotions from various financial institutions. This will help you plan for car ownership in the most suitable way.

However, if you’ve considered and feel that a used car is more suitable for you, you can come check out the carefully selected used cars from Motorist, all of which are genuine private vehicles!

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