How Long Can You Finance a Used Car?


When you’re out there for a used automobile, you could be eager about getting a mortgage. An auto mortgage means that you can buy a automobile with out paying your entire price upfront. You pay the cash again over a set time frame and pay curiosity on the quantity you borrowed.

Lenders sometimes present loans that vary from 36 to 72 months, however longer and shorter mortgage phrases can be found. Even with essentially the most beneficiant lenders, there’s often a most mortgage time period you’ll be able to select. When you’re questioning how lengthy you’ll be able to finance a used automobile, right here’s what you should know.

Examine auto mortgage charges right here

How Many Years Can You Finance Your Used Automobile?

Each lender has completely different guidelines round how lengthy you’ll be able to finance a used automobile. You would possibly discover that some lenders cap mortgage phrases at 84 months, whereas others offers you a mortgage for as much as 96 months. Traditionally, used automobile loans had 72-month limits. However as used automobiles gained reputation, it prompted lenders to started providing loans of 84 months and even longer, to fulfill client demand.

Is There a Restrict to How Lengthy You Can Finance a Used Automobile?

There isn’t any common most mortgage time period for a used automobile. Nevertheless, lenders and banks sometimes comply with widespread pointers, particularly because it pertains to age and mileage.

For instance, you often cannot finance a used automobile older than 10 years with a 5 yr mortgage. Equally, you may not be capable to finance a automobile with 150,000 miles for greater than three years.

The one solution to know the way lengthy you’ll be able to finance a used automobile is to learn your lender’s used automobile pointers, or converse to a consultant.

Brief vs. Lengthy Automobile Mortgage Phrases

Think about a number of elements earlier than financing a used automobile, together with the variety of months over which you intend to repay the mortgage. The 2 varieties of automobile loans are brief and long run. Relying in your life-style, finances, and spending habits, one time period would possibly go well with you higher than the opposite.

For instance, in the event you wish to drive the most recent automobiles with the most recent options, a short-term mortgage could be splendid. When you benefit from the concept of constructing reminiscences with the identical automobile for so long as it serves you, then a long-term mortgage could be extra appropriate.

Brief Used Automobile Mortgage Phrases: Professionals and Cons

Brief used automobile mortgage phrases function on a timeframe that is often between 12 and 60 months. The advantages of this finance interval embrace:

  • Refinancing: Among the finest methods to enhance your credit score rating is to make constant, giant funds. By making bigger funds over a shorter mortgage time period, your credit score would possibly enhance, and also you might be able to refinance to get a greater rate of interest.
  • Decrease curiosity: Paying much less curiosity over the lifetime of the mortgage is why many individuals select short-term loans.
  • Paying off the mortgage early: By getting a short-term mortgage that is now not than 5 years, you will have extra monetary freedom in the long term. Additional, the extra money you pay month-to-month, the earlier you will repay the mortgage.

Whereas the concept of a brief used automobile mortgage might sound proper to your plans, remember these potential downsides:

  • Much less room for budgeting: Though short-term automobile loans are nice methods to repay your debt rapidly, you need to adhere to a strict financing plan. If one thing sudden occurs and also you want a big amount of cash, you would possibly end up in a monetary bind due to the mortgage’s excessive month-to-month fee.
  • Increased month-to-month funds: You will need to spend extra money every month to repay your used automobile mortgage over a shorter interval. A bigger down fee can help you decrease the month-to-month funds exponentially.

Lengthy Used Automobile Mortgage Phrases: Professionals and Cons

Lengthy used automobile mortgage phrases often vary from 72 to 85 months or longer and provide clients a number of perks, together with:

  • Decrease month-to-month funds: One of many largest perks of lengthy used automobile mortgage phrases is fee flexibility. Paying off your automobile for an prolonged interval means decrease month-to-month funds.
  • Extra financial savings: Smaller month-to-month funds help you save extra money within the financial institution. When you put sufficient away in a financial savings account, you would possibly repay the mortgage early due to the curiosity gained on the account.

Regardless of decrease month-to-month funds, fee flexibility, and ongoing money stream, lengthy used automobile mortgage phrases include just a few cons to think about, together with:

  • Depreciation: Vehicles depreciate as quickly as you drive them off the dealership lot. Whereas used automobiles do not depreciate as rapidly as new ones, their worth declines over time. That is why the longer it takes you to repay your automobile, the much less worth it’s going to have. If its worth falls under what you owe on the mortgage, you will be the other way up, which makes it tough to commerce in your automobile.
  • Extra curiosity: Longer automobile loans often include increased rates of interest, because the longer the mortgage, the extra time that curiosity has to develop. You would possibly pay extra in the long term than you initially deliberate. To grasp the quantity you will pay, ask your lender for the rate of interest.

Finance & Insurance coverage Editor

Elizabeth Rivelli is a contract author with greater than three years of expertise masking private finance and insurance coverage. She has in depth data of assorted insurance coverage traces, together with automobile insurance coverage and property insurance coverage. Her byline has appeared in dozens of on-line finance publications, like The Steadiness, Investopedia,, Forbes, and Bankrate.


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