So, I’m new to the factory ordering process and I’m currently in the process of ordering one of Lexus’ rarest vehicles, the IS500 F Sport Performance (Premium package) and the dealer is quoting me one at MSRP ($63k). The funny thing is that when I searched up a couple of used ones nationwide with just a couple thousand miles, the OTD price goes anywhere between $75k-$85k. (Side note: I figured this car would be a perfect replacement for my aging 2008 Acura TL Type S) I’m the type of person who keeps their cars about 8-12 years before itching to get another one. So I naturally gravitate towards financing before looking at a lease option. And ordinarily, I would stay away from 7 or 8 year loans but in this instance, it’s starting to seem like it would probably make sense since one of the biggest downsides of a 96 month loan just went out the window. So unless I’m missing something, does a 96 month loan make sense in this instance?
The longer term is going to cost you more in interest (higher rate on a larger balance over a longer term) and you’ll be at risk of the value being below your loan balance for a longer period of time. Do the math on this first, and compare the total interest you’ll pay for the longer and shorter terms.
The second part can be mitigated with a down payment, maintaining liquid savings, or if you must, GAP (but that just adds more cost).
I personally hate debt, and I only have a car loan now because the rate is well under what liquid savings earns. But I also know I’m in the minority on this. Some of this depends on how you view money and indebtedness.
The ONLY way it would make sense is for the LOW monthly payments, you would pay a lot more in interest… if you wanna keep the monthly at the lowest end and have flexibility to pay EXTRA every month I would do it, otherwise NO NO NO lot more expensive TCO
Here, use this loan calculator to figure out the difference… roughly $4K for 96 vs 72 months as interest rates are lower on 72, 60 etc…
Short answer is no. First of, what is the interest rate for such a loan? As others have said, it will probably cost you more in interest payments vs say a 60 month or 72 month loan.
I don’t want to be that guy, but if you are considering a 96 month loan, maybe you should consider a more affordable car.
Depends on the terms. If you can get 96 months 0% sure , highly worth it(obviously not really doable in todays environment). If you are paying a significant interest premium to get it, then no.
If you are doing it to afford a car you couldn’t otherwise, probably not a great idea unless you have a large income increase coming soon.
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