Question: How Many Months Can An Auto Loan Be?

72 months

How long should your auto loan be?

The best car loan term is subjective. You’ll need to figure out how much you can afford each month before determining how long your auto loan should be. Loan terms can range from 24 to 72 months or more, and shorter loan terms lead to a higher monthly payment but a lower overall cost of financing.

Is a 60 month car loan too long?

Pay Off Your Car Loan Fast: A common car loan length is 60 months or 5 years long. Choosing a short-term car loan locks you into a larger payment versus a 60-month car loan, no going back and paying less. The good news is you are on a path to getting out of debt in a reasonable amount of time.

Are 84 month car loans a bad idea?

At the beginning of an 84-month auto loan — especially if you don’t give a down payment — your car is probably worth more than what you’re paying monthly for it. And at the end of the loan, your car is probably worth less than what you’re paying for it.

Is 72 month car loan bad?

You may owe money when you go to trade in your car. Virtually any expert will tell you that a 72-month car loan is hardly ever a good idea. If you sign off on splitting a short term loan, like a 24-month loan into a 72-month loan, there’s a high chance of paying much more than the vehicle is worth.

What is a good APR for a car?

Among all financing sources, the average APR on a new car loan for someone with good credit is right around 3% for new cars and just over 3% for used cars. The picture is brightest for people with credit scores above 720.

How much should I put as a downpayment on a car?

This means buyers who want to finance the purchase of a $15,000 used vehicle should plan to put at least $1,500 down. Lenders may require more money down on a new car than a used car to offset its quicker depreciation. Typically, an initial payment of 20 percent or more of the purchase price is wise.

Is it better to finance a car for 60 or 72 months?

Auto loans over 60 months are not the best way to finance a car because, for one thing, they carry higher car loan interest rates. Experian reveals that 42.1% of used-car shoppers are taking 61- to 72-month loans while 20% go even longer, financing between 73 and 84 months.

What is the shortest car loan?

In the end, our advice is simple: When you’re buying a car and considering a car loan, opt for the shortest term and the best possible interest rate.

What is the longest car loan?

In the final quarter of 2012, the average term of a new car note stretched out to 65 months, the longest ever, according to Experian Information Solutions Inc. Experian said that 17% of all new car loans in the past quarter were between 73 and 84 months and there were even a few as long as 97 months.

What is a normal car payment?

The average monthly car loan payment in the U.S. was $530 for new vehicles and $381 for used ones originated in the third quarter of 2018, according to credit reporting agency Experian. The average lease payment was $430. If those figures seem high, that’s because they are — and they’re all up year over year.

Is 7 years too long for a car loan?

While 7 years is a typical financing term, some car loans are as long as 10 years. Most people are so financially squeezed they live and die by monthly payments.

Are there 96 month car loans?

Pros and Cons of a 96-Month Auto Loan. The trend toward long-term loans for cars continues, with Experian reporting that 32.1 percent of new car buyers and 18.2 percent of used car buyers opted for long-term loans of between 73 and 84 months in the fourth quarter of 2016.

Is it better to finance a car through a bank or dealership?

Financing Through the Dealer

Dealer-arranged financing works the same way as bank financing—the only difference is that the dealer is doing the work on your behalf. In general, you can usually get lower interest rates on a new car through a dealer than on a used car.

What happens when you pay off a car loan early?

With most loans, if you pay them off sooner than planned, you pay less in interest (assuming it has no prepayment penalties). But that may not be true for your car loan. Put simply, it’s because those lenders want to make money, and paying down the principal early deprives them of interest payments.

What month is the best time to buy a car?

Shop late in the year and late in the month

The months of October, November and December are the best time of year to buy a car. Car dealerships have sales quotas, which typically break down into yearly, quarterly and monthly sales goals.