Auto Finance Questions
I have a 2-Tier question regarding an auto purchase:
The vehicle and auto terms that I have interest in has the following information:
- 2013 Mercedes GL 350
- 82,000 kms
- $42,000 everything included (with $1,000 doc/registration fee which I am not happy about (and except interest))
- 6.98% interest
- 60 or 72 month terms
My Credit Score just under 800
The dealership put an application in for approval and it was approved with the above terms. They indicated the application was approved at 6.98% at 72 months (He put 72 months just to see if they would approve the term length on this vehicle and I was also curious so agreed)
. I indicated to the finance manager that with my credit score, I have never received an interest rate ever over 6%. He indicated the following information:
- The age of the vehicle is the one pushing the rate up.
- The length of the term is also a reason for a higher rate. He indicate the longer the term, the higher the rate.
I indicated to him that it's too high. Like "this is a joke right?" high.
Question 1: With this information, is he correct about rate with the two factors (age and term length) that he indicated and how the current auto rates are at this time?
Also, for general knowledge as I can't find this answer anywhere:
Question 2: What auto term length corresponds to age of vehicle that lenders look at or approve?
1-2 years old = Up to 96 months term
2-3 years old = Up to 84 months term
4-5 years old = Up to 72 months term
6 years old = Up to 60 months term
+6 years old = Up to 48 months term
Is this correct, or is it in a different scale? The finance manager was just mentioning that banks/lenders usually don't loan longer than 72 for a vehicle 5+ years. Is this correct? Again, this is just general knowledge for me to understand how underwriters look at loans.
All your answers would be appreciated!
Thanks so much