
Current automotive trends are showing an increasing popularity in longer-term financing options. Experian Automotive reports that 24.9% of all new-car financing agreements were between 73 and 84 months in the first quarter of 2014. That’s a striking growth of 27.6% since the first quarter of 2013.
The big shift may stem from the fact that longer-term financing can help you free up money every month, as the amount you’re financing is stretched out over a longer time period. However, it’s important to keep in mind that a longer finance term also means that you’ll pay more in finance charges over time. You’ll have to determine whether or not the trade-off of a lower monthly payment is worth the additional finance charges before you decide to buy a new vehicle.
Changing finance trends may mean buying your next vehicle could make more sense than leasing. Here are a few reasons why.
Monthly Payments Similar to a Lease, but with Vehicle Ownership
When you’re in the market for a new vehicle, sit down to create a budget that will help you determine what makes most sense for your wallet. You can adjust the numbers to review how choosing a longer term for financing impacts your monthly auto payment. By choosing a longer term finance length, you could get a monthly payment similar to what you’d pay to lease the same vehicle for a shorter term. An important thing to keep in mind is that when you own, your payments can help build equity in your vehicle. When you lease, you are paying for the use of the vehicle and can drive a new vehicle more often, but you don’t build equity. OEM special incentive plans may be available when you purchase or lease a new vehicle.
Buying Gives You More Flexibility
When you lease, there are typically guidelines and requirements you need to follow as far as the maintenance and modification of your vehicle. When you buy, however, you have more flexibility to maintain and alter the vehicle as you see fit, with the exception of changes or actions that may void your warranty. Ultimately, the decision is yours as the vehicle owner.
You Can Drive as Much (and as Far) as You Like
When you lease a vehicle, you sign an agreement establishing the maximum number of miles you can drive—without incurring extra mileage costs—typically 15,000 or fewer miles each year, according to the Federal Trade Commission. At the end of the lease, if you go over that number, you’ll likely be required to pay a predetermined rate per additional mile. When you own your vehicle, you don’t have to be concerned with potential excess mileage charges.
Vehicle Dependability Is on the Rise
According to J.D. Power, vehicle dependability is on the rise, so drivers can feel more confident in their long-term durability. In fact, Automotive News reports that the average age of vehicles on the road is 11.4 years, which is expected to rise in the coming years. Drivers can take comfort in an increasingly elevating quality standard that could keep their vehicles on the roads for years to come.
Ally has a variety of finance term lengths to accommodate different customer needs, including the growing popularity of longer-term auto financing. For more information, and to see if you qualify for financing through your dealer and Ally, contact your local dealer.
Comment on this article
Comments
Glenn S. on April 21, 2015 at 3:35pm
I would love to refinance my car, it would great if I could do this, this would help me out a lot!
donald g. on April 21, 2015 at 5:37pm
i would like to refinance to lower payments.
janice r. on April 21, 2015 at 7:54pm
lower monthly payments
Irene H. on April 22, 2015 at 3:23am
Am considering paying off my car loan earlier. Could you tell me the payoff amount? What is the process? Thank you.
Gary P. on April 22, 2015 at 8:40am
Can I re-finance with you to lower my monthly payments?
Linda Z. on April 22, 2015 at 10:44am
I have a loan with Ally Bank now, can I change my car account to a longer loan to 72 or 84 months.
Lisa S. on April 22, 2015 at 12:10pm
I'm looking to see if it was a possibility to change from a 72 month to a 84 month loan to get the monthly payment down a bit. Thank you
Linda G. on April 22, 2015 at 4:16pm
I would love to lower my car payment if I could thank you
DANIEL L. on April 24, 2015 at 12:10am
IT WOULD BE NICE IF ALLEY OFFERED A REFINANCE ON CURRANT LOANS
Johnnie W. on April 26, 2015 at 5:28pm
I opened this e-mail to see what Ally had for me to read think you
joni B. on April 28, 2015 at 8:50am
l Love to have lower payments.
Patricia W. on April 29, 2015 at 6:22pm
I have a car loan with you that is in good standing. I would like to refinance the loan to get the payments lowered. Please tell me if this is possible. Thank you
carolyn k. on May 1, 2015 at 1:48pm
I would like lower payments on my truck
Robert P. on May 22, 2015 at 9:40am
It would be nice if you could pay over the Phone for FREE... not thru Western Union with a hefty fee... I have found that customer convenience is not at the top of Ally's list of things to do.....
Ally A. on May 22, 2015 at 3:15pm
Hi Robert, we’re sorry for your frustration, please email your phone number to allycommunity@ally.com so we can contact you. We also accept payments through the mail and on our new mobile app. You can check out your payment options here: http://www.ally.com/auto/payment/ and learn more about our mobile app on our blog: http://bit.ly/1gJkGWT.
Burton C. on August 4, 2015 at 6:05am
I am always browsing online for tips that can benefit me. Thanks!
Ally A. on August 4, 2015 at 10:01am
Hi Burton, thanks for stopping by!