Which Financing Term Should You Choose?

Your decision to buy a Toyota model was a no brainer, wasn’t it? It’s the versatility of the Toyota RAV4, the functionality of the Toyota Tundra, and the environmental efficiency of the Prius – there are so many reasons to own a Toyota in the first place. But a confusing decision is before you, even if you’ve already decided to finance instead of lease a Toyota. You need to ask a hard question: which financing term should you choose?

You’d think there is an easy answer, but it’s not always so simple. A few criteria make the decision of which financing term you should choose a little tougher, but ultimately, rewarding.

Which Financing Term Should You Choose?

48 months or less

If you rack up the miles faster than normal, you’ll benefit from a shorter financing term. Specifically, if you drive more than 15,000 miles per year, you should choose a 48-month term or shorter. It helps you build equity in your car sooner, which is good in the event you want to trade it in when your warranty expires. You can avoid negative equity.

48 to 60 months

If you drive an average of 10,000 to 15,000 miles per year, a great financing term is between 48 and 60 months. At this term, you’ll benefit from awesome financing rates that often dip near zero percent. You’ll also be paying your loan off while your car is still in good condition and has retained substantial value. Most car buyers should strive to finance for between 48 and 60 months if possible.

60 to 84 months

If you have negative equity in your old vehicle but need to buy a new Toyota, you’ll still need financing. Choose a term between 60 and 84 months to make your payments as low as possible. It’s also a great term to choose if you will invest in an extended warranty or service contract as, in most cases, you can purchase warranties that cover the whole term. If possible, choose the shortest term where payments are affordable so you can avoid future negative equity.

At Jay Wolfe Toyota, we’d love to help you answer the question of which financing term you should choose. With competitive rates and terms for all Toyota models, we’ll get you into the driver’s seat of your new car quickly and easily.