How Long Are Car Loans For On Used Cars

Car loans for used cars can vary significantly in length. Typically, used car loans range from 24 to 84 months, but some lenders may offer terms as short as 12 months or as long as 96 months.

The average used car loan term is around 60 months. This allows buyers to spread the cost of the vehicle over several years.

The longest used car loan terms are often offered to buyers with good credit and a stable income.

Used car financing options have become more complex, with over 70% of used car loan terms now exceeding 61 months. This is up slightly from 69.85% in Q2 2023.

The majority of used car loans have terms between 61 and 73 months. In fact, 25.86% of loans have terms of 73 months or more, a decline of 3.4% from Q2 2023.

Here's a breakdown of lease terms by credit score:

As you can see, lease terms vary significantly depending on credit score.

More than 70% of used car loan terms are 61 months or more, which is a significant increase from 69.85% in Q2 2023.

The average used car loan term for subprime borrowers increased by nearly a month, while deep subprime borrowers saw loan terms increase by an average of close to two months.

The percentage of used car loans with terms of 73 months or more declined by 3.4%, from 26.78% in Q2 2023 to 25.86% for the same period in 2024.

The average lease term for subprime borrowers rose from 36.49 months in Q2 2023 to 36.53 months in 2024.

Here's a breakdown of the average used car loan repayment term in months, by credit score:

Smaller Monthly Payments can be a blessing for those with a tight budget. A longer loan term can mean lower monthly auto loan payments. For example, financing a $30,000 new-car purchase over five years with a 3% APR, your monthly payments would be $539 each.

However, with a longer-term loan, you're making more payments. For this example, you'd make 84 monthly payments on the seven-year loan versus the 60 payments with the five-year term.

More than 70% of used car loan terms are 61 months or more, up slightly from 69.85% in Q2 2023. This means many people are opting for longer loan terms to keep their monthly payments low.

Here's a breakdown of average lease terms by credit score:

By choosing a longer auto loan term, you might be able to buy a more reliable car at a higher price. Just remember, you'll pay more in interest overall with the longer loan.

Car loan terms can be a bit confusing, but understanding them is key to making an informed decision. Typically, car loan terms range from 24 to 84 months, with the average used car loan term being around 65 months.

The longer the loan term, the lower the monthly payment will be. For example, a $35,000 loan with a 9% APR and no down payment would have a monthly payment of $1,113 for a 36-month term, compared to $727 for a 60-month term.

However, longer loan terms also mean paying more interest over the life of the loan. According to Experian data, the average used car loan term for subprime borrowers increased by nearly a month in 2024, while deep subprime borrowers saw loan terms increase by an average of close to two months.

Here's a breakdown of average used car loan terms by credit score:

Ultimately, the best auto loan term for you depends on your individual financial situation and needs. It's essential to weigh the pros and cons of different loan terms and consider factors like your credit score, income, and expenses.

The length of a car loan can have a significant impact on your finances. A longer loan term can mean lower monthly payments, but it also means you'll pay more in interest over time.

For example, extending a 60-month loan to an 84-month loan can increase the total interest paid by up to $3,700, as seen in a comparison chart. This is because a longer loan term means you're paying down the loan's principal more slowly and accruing interest over a longer period.

A longer loan term can also make it more difficult to pay off the loan in full, especially if you're upside down on the loan and owe more on the vehicle than it's worth. This can be a major concern if your car is totaled and your insurance won't cover the full amount of your loan.

On the other hand, a shorter loan term can save you money in interest, but it may require higher monthly payments. If you can afford the higher payments, a shorter loan term can be a good option.

Here are some general guidelines for choosing the right car loan term:

As you can see, a longer loan term can significantly increase the total cost of the vehicle, even if the monthly payments are lower. It's essential to consider your financial situation and choose a loan term that works for you.

To make a shorter loan term work for you, consider choosing a used vehicle, making a bigger down payment, or shopping around for the best deal. By doing so, you can save money on interest and pay off the loan more quickly.

Many buyers opt for longer-term car loans, often between 60 to 72 months, to keep monthly payments low.

In fact, 60-month loans have become increasingly popular, with some lenders offering terms up to 84 months.

Buyers with lower credit scores may benefit from longer loan terms, as they can qualify for lower interest rates.

However, longer loan terms can lead to paying more in interest over the life of the loan.

More than 70% of used car loan terms are 61 months or more, which can be a significant commitment. This percentage has increased slightly from 69.85% in Q2 2023.

However, if you're looking to buy a used car, there are ways to make a shorter loan term work for you. For example, choosing a used vehicle can help you swing a shorter loan term, as new vehicles lose significant value in the first year after purchase.

Here's a breakdown of the average lease terms for different credit score segments in Q2 2024:

Remember, while longer loan terms may reduce your monthly payments, the extra interest you pay can outweigh the month-to-month savings.

Choosing a car involves more than just the monthly payment. The total amount of interest you'll pay is a crucial factor to consider.

The longer your loan term, the more interest you'll pay. For example, a $35,000 loan with 9% APR and no down payment can result in significantly different total interest payments depending on the loan term.

Making sure you can afford the monthly payment is essential, but it's equally important to weigh that against the total interest you'll pay. This can help you avoid financial strain down the line.

A longer loan term may seem like a good option to reduce monthly payments, but it can lead to a higher total interest payment.

As you consider purchasing a car, it's essential to think about resale values. Your vehicle will decrease in value over time, with each passing year reducing its worth.

If you plan to sell your car after seven years, you could receive as little as 20 percent of its original price.

This means that a car that cost $30,000 new could be worth just $6,000 after seven years.