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      09-14-2017, 01:47 AM   #1
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Who has the best 84-Month Auto Loan Rate?

Penfed is currently 3.84% for 84-months. However, I can get a 72-month auto loan from AAA at 2.29%, which makes a lot more sense. If there is an 84-month loan out there for around the same rate, I would go with that instead.

If anyone has found a better rate than these offers, please let me know. It would be very much appreciated.

Thanks in advance!
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      09-14-2017, 02:09 AM   #2
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jebus, a 7 year loan? I thought I was a little crazy looking for 60 months.
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      09-14-2017, 08:13 AM   #3
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The longer term you go the more interest pay at the end of your loan. If someone has to get more than 60 months for a loan than they truly cannot really afford the car and should look at something more realistic IMO.
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      09-14-2017, 08:20 AM   #4
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Quote:
Originally Posted by chmura View Post
The longer term you go the more interest pay at the end of your loan. If someone has to get more than 60 months for a loan than they truly cannot really afford the car and should look at something more realistic IMO.
If you plan on keeping the car for your yet to be born son, and your rate is under 3, why not finance as long as possible? You can put in any index fund and make more. The discipline is not spending that extra your not putting towards the car loan into mods
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      09-14-2017, 09:59 AM   #5
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Quote:
Originally Posted by chmura View Post
The longer term you go the more interest pay at the end of your loan. If someone has to get more than 60 months for a loan than they truly cannot really afford the car and should look at something more realistic IMO.
Not true. If you finance at a low rate, it's like free money, better to put money into something that will make money. Especially on the M2. With the used car values this good, you will never really be upside down on the loan. Also you can always pay the car off at any time without pentalty, so it's really Personal preference.
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      09-14-2017, 10:35 AM   #6
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Quote:
Originally Posted by ineedae46m3 View Post
Quote:
Originally Posted by chmura View Post
The longer term you go the more interest pay at the end of your loan. If someone has to get more than 60 months for a loan than they truly cannot really afford the car and should look at something more realistic IMO.
Not true. If you finance at a low rate, it's like free money, better to put money into something that will make money. Especially on the M2. With the used car values this good, you will never really be upside down on the loan. Also you can always pay the car off at any time without pentalty, so it's really Personal preference.
This.

Again, I can easily do a 72 month loan, even a 60 month. But I would rather keep my monthly payments low on a car that holds its value well, and put my money elsewhere. In addition, the car will be tax deductible for my business. Unlike a lease where the monthly payments get deducted, a percentage of the purchase price is what gets deducted instead. So I appreciate the financial advice from others here, but I got that covered already
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      09-14-2017, 11:29 AM   #7
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Quote:
Originally Posted by bimmer4life24 View Post
Penfed is currently 3.84% for 84-months. However, I can get a 72-month auto loan from AAA at 2.29%, which makes a lot more sense.
I'm currently shopping for a 72 month loan. I could go to a 66 month if there are some good rates there, but I'd rather not go 60.

How were you able to get 2.29% over 84 from AAA? I'm not a member, but would consider becoming one if I could get a rate like that!
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      09-14-2017, 11:56 AM   #8
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Quote:
Originally Posted by Nezil View Post
Quote:
Originally Posted by bimmer4life24 View Post
Penfed is currently 3.84% for 84-months. However, I can get a 72-month auto loan from AAA at 2.29%, which makes a lot more sense.
I'm currently shopping for a 72 month loan. I could go to a 66 month if there are some good rates there, but I'd rather not go 60.

How were you able to get 2.29% over 84 from AAA? I'm not a member, but would consider becoming one if I could get a rate like that!
The AAA loan at 2.29% is for 72-months, not 84. I work for AAA and also am a AAA member. As long as you have a AAA membership ($49/year), you can sign up for their auto loans. You can go to www.aaa.com to check your local rates

AAA membership will also get you free towing and roadside
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      09-14-2017, 12:09 PM   #9
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Quote:
Originally Posted by bimmer4life24 View Post
The AAA loan at 2.29% is for 72-months, not 84. I work for AAA and also am a AAA member. As long as you have a AAA membership ($49/year), you can sign up for their auto loans. You can go to www.aaa.com to check your local rates

AAA membership will also get you free towing and roadside
2.29% for 72 months would also be awesome for me, so I am interested, and would be happy to sign up.

Having said that, as soon as I go to www.aaa.com, I'm forwarded to calstate.aaa.com, and nothing on that site mentions auto loans. I tried looking through the discounts section and can't find anything there either. Are loans region specific?
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      09-14-2017, 12:18 PM   #10
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Quote:
Originally Posted by Nezil View Post
2.29% for 72 months would also be awesome for me, so I am interested, and would be happy to sign up.

Having said that, as soon as I go to www.aaa.com, I'm forwarded to calstate.aaa.com, and nothing on that site mentions auto loans. I tried looking through the discounts section and can't find anything there either. Are loans region specific?
I believe they are region specific. There should be an automotive tab on the site. If not, try to call 800-222-4357.
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      09-14-2017, 12:22 PM   #11
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Originally Posted by bimmer4life24 View Post
I believe they are region specific. There should be an automotive tab on the site. If not, try to call 800-222-4357.
Thanks, I'll try calling.

I took a look at your local website - chicago.aaa.com, and it's WAY different. There is no reference to auto loans on the calstate site at all, but it was easy to find on the Chicago one.
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      09-15-2017, 04:06 AM   #12
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Quote:
Originally Posted by bimmer4life24 View Post
The AAA loan at 2.29% is for 72-months, not 84. I work for AAA and also am a AAA member. As long as you have a AAA membership ($49/year), you can sign up for their auto loans. You can go to www.aaa.com to check your local rates

AAA membership will also get you free towing and roadside
No AAA loans in Ohio either, sadly. I'd love to go through AAA instead of a giant bank or some credit union I've never heard of.

Paying off a car over 6-7 years is not my idea of fiscally prudent... Especially when a huge chunk of that value is instantly flushed down the toilet the second it drives off the lot.

How are you deducting the car? Can't imagine it's Section 179 since that loophole has been closed for a while... (Or did you just mean that the interest on the loan is deductible?)
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      09-15-2017, 09:07 AM   #13
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Quote:
Originally Posted by ineedae46m3 View Post
Not true. If you finance at a low rate, it's like free money, better to put money into something that will make money. Especially on the M2. With the used car values this good, you will never really be upside down on the loan. Also you can always pay the car off at any time without pentalty, so it's really Personal preference.
I agree that rates are low, but your duration argument falls apart when you look down the curve and see 1.49% for 3 years -- THAT is borrowing for nearly nothing.
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      09-15-2017, 10:57 AM   #14
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Quote:
Originally Posted by chmura View Post
The longer term you go the more interest pay at the end of your loan. If someone has to get more than 60 months for a loan than they truly cannot really afford the car and should look at something more realistic IMO.
A 7 year loan is roughly equal to a lease payment. If you plan to get out in say 5 years you can usually sell the car at a profit, pay off the loan and still have some left over for a nice down payment on the next car.

Though if buying the car I wouldn't want to exceed a 5-6 year term.
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      09-15-2017, 11:01 AM   #15
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I agree that rates are low, but your duration argument falls apart when you look down the curve and see 1.49% for 3 years -- THAT is borrowing for nearly nothing.
^^ this

I went for the PenFed 36mo at 1.49% myself. I couldn't imagine a car loan any longer than 60 months, but that's just me.
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      09-15-2017, 12:55 PM   #16
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A 7 year loan is roughly equal to a lease payment. If you plan to get out in say 5 years you can usually sell the car at a profit, pay off the loan and still have some left over for a nice down payment on the next car.

Though if buying the car I wouldn't want to exceed a 5-6 year term.
This is why I'm not concerned about having a loan for a longer duration. I have no intention at this point in continuing the loan for the full duration, and will probably pay it off early with a lump some from the sale of my wife's car when we replace hers.

A short while ago, my wife and I agreed to a 6 year cadence for replacing cars, and to alternate replacing each others cars therefore every 3 years. There is some flexibility in the timing, but we'll never have a situation where we have two cars on finance at the same time, and we'll also never pay more than $600 / month.

So I was due to replace my car in March next year, but my M2 will be arriving in late October, so I'm ahead of schedule... According to our agreement, I can only get a new car if I'm able to pay off the existing loan on my wife's car (a 60 month loan, but we're only 18 months into it) and have a big enough downpayment and term to reduce my payments down to $600 / month for the M2.

Fortunately the sale of my current car will pay off the loan on hers, and I have enough saved up to put as a downpayment for the M2, but I need a 66 or 72 month loan to meet the $600 / month limit we agreed upon.

I expect to pay of the M2 in full when we replace my wife's car in about 3 years, but if for whatever reason my situation changes, I'm not stuck with a monthly finance that I can't afford.

A long term and low monthly is sort of an insurance policy for us...
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      09-15-2017, 04:48 PM   #17
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So I spent some time recently shopping around for car loan rates, and generally I found that at most credit unions, you can get the same rate for a 60 mo loan as you can for a 72 mo loan, but once you get to 84 months, the rate increases. I secured a 1.99% rate on a 72 month loan with a credit union in LA. That was the best I found after trying a dozen credit unions. I was in the same boat as you; could afford to pay much more, but at 2%, I'd rather invest the money I'm saving. Didn't feel like paying 2.29% for the 84 month loan, though, which is the lowest 84 mo loan I found.
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      09-15-2017, 05:00 PM   #18
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Originally Posted by Xtianh View Post
So I spent some time recently shopping around for car loan rates, and generally I found that at most credit unions, you can get the same rate for a 60 mo loan as you can for a 72 mo loan, but once you get to 84 months, the rate increases. I secured a 1.99% rate on a 72 month loan with a credit union in LA. That was the best I found after trying a dozen credit unions. I was in the same boat as you; could afford to pay much more, but at 2%, I'd rather invest the money I'm saving. Didn't feel like paying 2.29% for the 84 month loan, though, which is the lowest 84 mo loan I found.
2.29% on a 84-month term is pretty low. Which credit union offers that?
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      09-15-2017, 05:03 PM   #19
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No AAA loans in Ohio either, sadly. I'd love to go through AAA instead of a giant bank or some credit union I've never heard of.

Paying off a car over 6-7 years is not my idea of fiscally prudent... Especially when a huge chunk of that value is instantly flushed down the toilet the second it drives off the lot.

How are you deducting the car? Can't imagine it's Section 179 since that loophole has been closed for a while... (Or did you just mean that the interest on the loan is deductible?)
If I'm not mistaken, you can still deduct up to $25k as a vehicle expense. Don't take my word for it tho. Got to check with the accountant.
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      09-15-2017, 05:56 PM   #20
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Quote:
Originally Posted by Xtianh View Post
So I spent some time recently shopping around for car loan rates, and generally I found that at most credit unions, you can get the same rate for a 60 mo loan as you can for a 72 mo loan, but once you get to 84 months, the rate increases. I secured a 1.99% rate on a 72 month loan with a credit union in LA. That was the best I found after trying a dozen credit unions. I was in the same boat as you; could afford to pay much more, but at 2%, I'd rather invest the money I'm saving. Didn't feel like paying 2.29% for the 84 month loan, though, which is the lowest 84 mo loan I found.
Which credit union was this?
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      09-16-2017, 01:51 AM   #21
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Originally Posted by bimmer4life24 View Post
If I'm not mistaken, you can still deduct up to $25k as a vehicle expense. Don't take my word for it tho. Got to check with the accountant.
Yeah, you might want to read up on that further. Pretty sure that number is high.

If you're self-employed and you use the car 100% for business, you can deduct the interest from the loan (which is to your advantage).

There's something called a Section 179 deduction that is a one-time thing that you can claim on the first year you put the vehicle into service, but as of 2016 that was limited to roughly $11k, and it's only that high if you're using the car 100% for business purposes.

IRS publication 463 is worth a read.

Note: I am not an accountant, but my dad is... I've learned that there aren't nearly as many tax loopholes around cars as people think there are.
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      09-16-2017, 07:32 AM   #22
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I would only do that amount of months if the interest rate was very low.

I did 72 months because it was 0.9%

On used cars its a different story, 3.45% at 75 months to keep payment low with no penalty of paying more or paying off before is usually what a solid credit union will offer you.

PenFed offered me 1.49% on a USED car loan but at 2 years it would have a higher payment than the M2.
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