Which is the better vehicle loan choice?

[yoopermom]

DH and I are both in our mid40s, with a soon to be 16yoDS(sophomore). We have NO debt except a 10K student loan of mine that will be paid off with an inheritance that is coming in the next few months. We don't make much, but we're frugal. I drive an 03 Subaru that's paid off, and DH is about to buy an 03 Dodge Ram from a private seller for 7K. Due to our excellent credit rating we have the choice of:
3.45% for 24 months
or
3.99% for 36 months

I'm torn, because, with the 24 month we'd have it paid off DS's senior year, but the lower payment of the 36 month would be nice since I'm only working p/t right now. (We're also planning on using any tax return from this year to pay towards the loan, as well.)

WWYD?

Thanks!
Terri

 

[DaveClan]

Have you looked into joining a local credit union? Pentagon Federal Credit Union for instance is offering car loans at 2.99% for 24, 36, 48, 60 months...

 

[AmberHeartsDisney]

well the less you pay the better but only you know what you can afford.....

 

[MissAndrea]

IMHO, go with the 36 mo loan even though the interest is higher because you can pay extra every month and try to pay it off in 24 (and not pay as much interest over the life of the loan). That way if you are ever in a bind for a month, you can still pay the lower payment and it not be a problem. Then go back to paying extra on it when you can.

 

[yoopermom]

This is our credit union rate (we actually belong to two different ones, and the rates are the same at both). I've checked around, and they are the best rates within driving distance.

And that's a good point about being able to pay more if we have more. Thanks!

Terri

 

[pipervali]

Those rates aren't bad at all honestly.

The half interest extra is probably going to end up being pretty negligible if the lower payments are going to make things easier on you financially. And as the previous poster said, this way you have a little wiggle room, but nothing is stopping you from adding extra onto the payment when you have it.