What Is the Longest Term I Can Get on a Car Loan?

Car loan term options differ by lender. The amount of money you want to borrow or your credit standing may restrict your term options. Some lenders may offer up to 84 months or longer for an auto loan, although restrictions may apply, based on the vehicle you choose.

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To determine the longest term allowed by the loan provider your want to use, call potential lenders to inquire. Also, find out if any restrictions apply to available term options. Some lenders may offer loans that exceed 72 months, but may require that your loan amount meet a certain threshold, or that you meet certain credit requirements. The age of your vehicle and its mileage can also affect your approval term.

Benefits

You may benefit from limiting your loan term to create vehicle equity and minimize your debt. A longer term provides a lower monthly payment, however, which you can use to your advantage while your finances are limited, or your loan payoff decreases. A 7-year car payment or longer can cost you thousands in interest, but you can provide a down payment to decrease the interest charges. You can also refinance the vehicle later to decrease your term and lower your rate; you are not stuck in a long-term finance.

Depreciation Considerations

Consider your vehicle use and its depreciation. If you plan to keep your vehicle until it no longer runs, you might not be concerned with future market values. If you normally trade out of your vehicle every few years, however, you may have to provide a down payment or choose a shorter-term option. Otherwise, your extended term creates a negative equity position, meaning you'll owe more than your car is worth. Provide a down payment to avoid this situation. Otherwise, you're likely to need a down payment to trade out of the car, in the future.

Interest Rates

Most lenders offer consistent interest rates for loan terms up to 60 months. Longer terms result in a higher interest rate, which affects your overall payback amount. Use an auto loan calculator to determine the total amount you'll pay for interest charges. You may also find your loan term length limited if you pursue a manufacturer offer. Manufacturers offer low-rate options, but for shorter terms. For example, you may obtain a zero-percent loan, but only for a term of 60 months.