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www.rivervalleyloans247.com/When getting a new or used car loan, one decision you’ll make is how long to finance the car. A car’s loan term, or how long you have to repay the loan, affects everything from your monthly payment to how much interest you pay overall.
The most common car loan terms are 24, 36, 48, 60, 72 and 84 months, but some lenders also offer 12-month and 96-month car loans. While car loan terms are usually in 12-month increments, there are lenders willing to offer other options if needed by a borrower.
According to consumer credit reporting company Experian, the average auto loan term in the third quarter of 2023 was 68.26 months for new cars and 67.57 months for used cars. The average car lease was 36.18 months.
What to consider when choosing a car loan term
Often, car buyers focus mainly on a car loan’s monthly payment. Making sure you can afford the payment each month is important, but so is weighing that against other factors like the total amount of interest you’ll pay.
The following example shows the difference loan term makes when comparing the same car loan — a $35,000 loan with 9% APR and no dow