Loan Terms | Tips and Advice | Edmunds

Long-Term Car Loans Will Cost You More: Should You Take Out a 72-Month Car Loan?


Edmunds senior consumer advice editors Ron Montoya and Matt Jones discuss the trouble with very long car loans: You pay more in financing charges and may be sick of the car long before you pay it off.

Matt: Hi, I'm Matt and this is Ron. We're senior consumer advice editors here at Edmunds.

New cars are more expensive than ever, and as a result, people are stretching out their loans to keep the payments manageable. The average new-car loan is just over 69 months long, and many people are taking out 72-month new-car loans.

Ron: Yeah, and you'd think it would be better on the used-car side, but the average used-car loan term is around 66 months. Imagine buying a 4-year-old used car with a term like that. By the time you're done paying it off, it will be 10 years old.

Matt: That's scary. Here's what you can do to keep down the length of your loan:
Consider making a bigger down payment.
Consider leasing.
You might not want to hear it, but you may have to choose a less expensive vehicle.
We recommend a loan term of about 60 months.

Ron: And make sure you keep the car for a while after it's paid off. Otherwise, you may as well be leasing.


If you want to see what your payments look like on a shorter loan, take a look at our auto loan calculator on Edmunds. https://www.edmunds.com/calculators/simplified-pricing.html


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