The other day hubby and me were talking about car loan tenure - whether shorter tenure or longer tenure will be more beneficial. For a wage earner like me, I prefer to make larger down payment with shorter tenure. Which means that I will save a certain amount of money first before purchase a car and will try to settle the loan repayment within the shortest tenure possible. Of course, I must be comfortable with the monthly repayment. My main aim is to own the car as soon as possible and at the same time to reduce the loan interest. The shorter the loan tenure, the less interest I have to pay.
Hubby totally have a different point of view. He prefer to take full loan and to have the longest tenure available. His reasons as below:
1) The car value will depreciate. So, he said there's no point to rush to settle for something which the value will depreciate. The car is just another daily necessity, not an appreciating asset. So, he tries to minimize monthly repayment value by taking the longest tenure available. Longer tenure means smaller monthly repayment and small monthly repayment means he'll have additional cash for other matter (his business).
2) Full loan because he no need to fork out his money for down payment. He can use the money which supposed to be used as down payment as his business cash flow. This will increase his business profit (use money to make more money).
What is your view?