Weigh in on your options before biting, though.
Honda has begun offering an 84-month financing option to attract buyers as of April 1, 2022. Prior to this, the longest financing term offered by Honda Financial Services was 72 months.
The decision to provide the lengthier finance term is based on input from the automaker’s dealer network, according to a dealer advisory acquired by CarsDirect. Some automobile buyers may find the seven-year financing period appealing if they want to buy a Honda with reduced monthly payments. However, there is a disadvantage to the flexible financing option.
A longer loan term, of course, equals higher interest rates, which means you’ll end up paying much more than the MSRP. The 84-month finance term is also only available with Honda’s Standard New Retail Programs, according to CarsDirect. This implies that it has standard rates, which are usually higher than promotional rates.
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Interest rates differ depending on the buyer’s credit score and the buyer’s location. Honda’s stated rate in Washington, according to CarsDirect, is 5.04 percent for an 84-month loan with a FICO score of 760 or above. On top of that, a 1% dealer interest rate markup may be applied.
A credit score of 660 to 669 could result in an interest rate of up to 8.85 percent in the worst-case scenario (with dealer markup). A $30,000 purchase can easily cost a buyer more than $40,000 over the course of seven years, which is easy to ignore because to the lower monthly payments.
Honda isn’t the first automaker to offer a seven-year financing term for its cars. Ford and Kia have the same option, as well.
If you’re in the market for a car and you find this longer financing option attractive, you might want to shop around and find the best rate for you.
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Source:Â CarsDirect
