Quote:
Originally Posted by GoEagles88
No more car payments for me, but a good rule of thumb that has served me well over the years is this:
Total amount you finance payment
15000 300
20000 400
25000 500
30000 600
These figures are in rough terms, but they are fairly accurate for 5 year terms. For every 5000 in loan value you can add 100 to your monthly payment. Easy to remember and easy to figure out what you'll pay. If you go 6 years, it won't work. Frankly though in my opinion, 72 months will take forever for you to build any equity (not be upside down) in the vehicle and should be avoided unless you have no other option.
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Actually, depending on the rate, the longer you can go the better. This is finance 101, if you can earn a better rate of return than what you are paying, you do it. Take the increased cash flow you have from going with a seven year term vs. three and invest it at a higher rate and you will be much further ahead in the long run.