The most common term currently is for 72 months, with an 84-month loan not too far behind. In fact, nearly 70% of new car loans in the first quarter of 2020 were longer than 60 months — an increase of about 29 percentage points in a decade. The trend is similar for used car loans.
Just so, what are typical car loan terms?
In 2019, the average term length was 69 months for new cars and 65 months for used vehicles. Most car loans are available in 12 month increments, lasting between two and eight years. The most common loan terms are 24, 36, 48, 60, 72, and 84 months, according to Autotrader.
Also to know is, can I get a 12 month car loan?
A short auto loan length may be 36 months to one borrower, and 12 months to another. A 60-month car loan was long considered conventional, but the average new-car buyer is creeping closer to 70 months. Some banks and credit unions even offer 96-month terms.
How old of a car can I finance for 72 months?
Typically, a bank won’t finance any vehicle older than 10 years, even if you have good credit.
5 Tips for Buying a New Car
- Find Out the Cost of Insurance. Your insurance rates typically change when you acquire a new vehicle. …
- Look for Safety Technology. …
- Consider Vehicle Design and Size. …
- Get Pre-Approved for a Car Loan. …
- Negotiate the Best Price.
Disadvantages of 96-month auto loans
Increase the chances of being upside down longer – You increase the chance of having negative equity in the car for a longer period of time. This can be a problem if your car gets totaled, breaks down, or you decide you want to sell or trade it in before the term is up.
But if you need to finance a vehicle for six or seven years – 72 to 84 months (or more) – there’s a good chance you really can’t afford it, based on research by the Consumer Financial Protection Bureau (CFPB), even though vehicles generally are lasting longer than ever before.
How long is 84 months? 72 months is six years. 84 months is seven years.
Generally, the longest loan term you’ll find is seven years, or 84 months. There are, however, some lenders that will extend used car financing to 92 or 96 months, or up to eight years. In 2018, 55% of new car loans originated were for 84 months.
Used Cars: The average length of a used car loan is 65 months. Like with new cars, the most common loan term for used vehicles as of 2021 is 72 months. Even though used cars are generally around $10,000 less than new ones, consumers are taking the same amount of time to pay off the sticker price of the vehicle.
The average life of a car is about 9.4 years, so a loan of more than 5 years can leave you unable to sell for most of the car’s life.
According to Middletown Honda, depending on your credit score, good car loan interest rates can range anywhere from 3 percent to almost 14 percent. However, most three-year car loans for someone with an average to above-average credit score come with a roughly 3 percent to 4.5 percent interest rate.
A zero-percent interest offer eliminates any interest payments on the auto financing. While we still don’t recommend long loan terms, a 72-month zero-percent loan is not as potentially financially destructive as a long loan with a high interest rate.
A good rule of thumb is to put at least a 20% down payment on a vehicle to avoid financial insecurity. Another way that 0% financing can be a bad deal is if it’s just too long of a loan. Typical car loan terms range from 3 to 5 years. Sometimes these deals stretch out for 72 months or six years.