How Long Can I Finance a Used Car?

If you’re preparing to purchase a budget-friendly pre-owned car, you might be wondering, “How long can I finance a used car?” The average auto loan term is about 60 to 72 months, but as car costs rise, you might see this loan term get even bigger over time. While there are loose restrictions on how long you can finance a vehicle, the length of your loan term mostly depends on your monthly budget.

Learn how long you can finance a used car, and find out whether a short-term or long-term loan is your best option for financing a used car in the Meridian area. For all of your used car financing and car-buying tips, rely on the expertise of Peterson Chrysler Dodge Jeep Ram!

Maximum Amount of Time for Used Car Financing

So, what’s the maximum amount of time that you can take to repay your loan? There’s no set number, but most banks put a few rules in place, so it all depends on your lender. Some banks have a policy on used cars that prevents buyers from financing vehicles over seven years old and with over 100,000 miles on their odometers. If you’re not sure about the criteria in place for your particular lender, be sure to reach out to them to find out. You can also speak with our finance center about your used car financing options and get any additional questions answered.

Short-Term Loans vs. Long-Term Loans: Which Is Best?

You know how long you can finance a used car, but how long should you finance a used car for? Below, we break down the pros and cons of short-term and long-term loans to help you decide which option is best for you:

Short-Term Loan Pros

• Low-Interest Expenses: Because you pay off the loan over a shorter amount of time, you’ll pay less interest overall compared to a longer-term loan.
• Faster Pay-Off: Paying off your loan faster means you can free up funding for other financial goals.
• Refinancing: Compared to long-term loans, you’ll spend far less time “upside down” on the loan. This means it’s easier to refinance in Boise, which can save you money in the future.

Short-Term Loan Cons

• Higher Monthly Payment: Because your loan is stretched out over a shorter period of time, your monthly payments will be higher than a longer-term loan.

Long-Term Loan Pros

• More Affordable Monthly Payment: Long-term loans stretch your car’s price over a longer period of time, which means your monthly payments are more affordable every month.

Long-Term Loan Cons

• Higher Interest: The longer you pay off your loan, the more interest you’ll pay overall.
• Vehicle Depreciation: When your car is valued at less than the balance of the loan, it’s called “negative equity” or being “upside down”. The longer the car loan, the longer you’ll stay in negative equity.

So, how long can you finance a used car? Visit our dealership to explore our used inventory and see what your loan options are! Then, work with our car-buying experts to decide what the best option is for you.

Find Affordable Used Car Financing in Nampa!

Hopefully, you know the answer to the question, “How long can I finance a used car?” But, if you still have questions about the used car financing process, don’t hesitate to reach out to us at Peterson Chrysler Dodge Jeep Ram. Contact us or make the drive to our finance center from Caldwell to see what we can do for you.