Longest Car Loans: What To Know and When They Make Sense
Auto loans usually range from 36 to 60 months, but if you want the longest car loan, you may be able to get 72-month or 84-month terms.
A repayment period that long (up to seven years) means lower payments, making a long-term car loan easier on your budget. However, you’ll have a longer financial commitment and probably pay more interest over time.
What’s a long-term car loan?
An 84-month auto loan isn’t very common when buying a car — a recent LendingTree study found that the typical car loan term in the U.S. is 65.4 months.
Taking longer to repay the loan can be a good thing if you can get a good deal, maybe with a long warranty and no early-payoff penalty.
But sometimes short-term car loans make more sense, especially if you have the money and might want to sell the vehicle while it’s still not that old.
When an 84-month or longer auto loan DOESN’T make sense
When you can afford a shorter term
While an 84-month car loan offers the advantage of lower monthly payments, it may not be the best choice if you can afford a shorter term.
In the table below (with data from a 2024 Experian study), you can see that the longer the car loan term, the more interest you’ll pay.
The numbers are for an average borrower financing $40,634 for a new car with an annual percentage rate (APR) of 6.73%. Here, the shorter-term loan can save more than $4,500 over the longest.
| Loan term | Monthly payment | Total interest paid | Total cost to own car |
|---|---|---|---|
| 36 months | $1,249.65 | $4,353.00 | $44,987.39 |
| 48 months | $967.95 | $5,827.59 | $46,461.59 |
| 60 months | $799.44 | $7,332.15 | $47,966.15 |
| 72 months | $687.51 | $8,866.95 | $49,500.95 |
When you’d be upside-down on your loan
With an 84-month term, you could find your car has lost a good part of its value as you enter the final year or two of your loan.
Most of your early payments may go toward interest rather than reducing the principal. By the time you start really cutting into the principal, your car could be worth less than what you still owe on it — a situation known as an upside-down loan.
With the extended loan term, there’s more time for the car to lose value, making an upside-down loan more of a risk.
When you may run into repair issues
The cost of common car repairs is not always cheap. Getting a new fuel pump, for example, usually runs above $1,200.
With the longest car loans, you may find the upkeep costs for your car are pretty high by the time you finish paying it off, especially if it’s out of warranty.
If you’re hoping to sell the vehicle once it’s paid for, a shorter loan means it will be in better shape when you’re ready to change cars.
When an 84-month or longer auto loan CAN make sense
When it’s the best way to afford a reliable car
An 84-month auto loan can be practical if you need to finance a reliable vehicle but have a limited income. Spreading the payments over a longer term reduces the monthly financial burden, making it easier to budget.
This option can be especially useful if the car you want is essential for daily use or you need a more manageable monthly payment to handle other costs.
When there’s no early payoff penalty
If you expect your financial situation to improve over the loan term, you can always take out a long loan but then pay off your car ahead of schedule, saving money on interest like with a shorter loan.
But be careful: Some lenders charge a prepayment fee or early payoff penalty. A 72- or 84-month loan is only advantageous if there’s no penalty for early repayment.
When the car has a long warranty
According to Kelley Blue Book, the average auto warranty coverage lasts three years or 36,000 miles, meaning it will likely expire before the end of your long-term auto loan.
Because of this, you’ll want to look for an extended warranty. Without it, you’ll be responsible for the full cost of repairs after just a few years, which could offset the benefits of lower monthly payments.
When you qualify for a low APR
A high APR drives up the total cost of your car loan, but if you qualify for a low APR, an 84-month loan becomes a more appealing option.
If you have good to excellent credit, your APR will usually fall on the lower end. Be sure to compare multiple auto loan offers to ensure you’re getting the best rate available to you.
To get a better idea of how much your monthly payments will run for a particular loan, try using our auto loan calculator.
Alternatives to a long-term car loan
Save and buy a car with cash
If you want to pay no interest at all and take full ownership immediately, then buy the car with cash. Of course, this requires savings. You’ll want to know what type of car you want and whether you plan to buy new or used, so you can have a better idea of how much to save.
Save and make a larger down payment
If you want a lower monthly payment without turning to a long-term car loan, think about making a larger down payment. Increasing your down payment reduces the amount you’ll pay in interest over the life of the loan.
Consider using the 20/4/10 car-buying rule — which calls for a 20% down payment and four-year term — if it’s manageable for your budget.
Find a more affordable car
Since the car’s price plays a big influence on the loan term, buying a less expensive car can help if you want to go with a shorter loan term. The cheaper the vehicle, the less your payments will be, regardless of your loan term.
Overall, this option helps you keep some financial flexibility as you buy your car.
Lease a car
Leasing a car is another alternative to a long-term car loan. While you don’t take ownership of the vehicle at the end of the lease term, it’s less of a commitment than buying. With a lease, you get lower monthly payments and the opportunity to get a new lease (and drive a new car) every few years.