How Long Can You Finance a Used Car?

How long can you finance a used car? You’ll find that the average auto loan term is about 60 to 72 months. You may also find that those times increase as used car prices continue to go up. It’s also important to note that the length of your loan also depends on factors such as how much of a monthly payment you can afford. Find out more about used car auto loans below so that you can make a smart financial decision. 

Used Car Loans: Dealer vs. Car Dealership

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. However, many dealerships can get financing that includes those models. If you’re looking at an older vehicle or a vehicle with more mileage, you’ll be better off applying for financing with a dealership. 

Long-Term vs. Short-Term Loans

When financing a used car, you may have the option to take out either a short-term or long-term loan. Find out the pros and cons of both with Straub Nissan:

Short-Term Loan 

Pros:

• You’ll pay less interest over time
• You can pay off your loan faster
• You can refinance your loan down the road

Cons:

• Short-term loans have a higher monthly payment than long-term loans

Long-Term Loan

Pros:

• Long-term loans allow you to make smaller monthly payments. This can come in handy if you’re ever in a tight financial situation

Cons:

• The longer the loan, the more interest you’ll pay
• Since cars depreciate over time, a longer auto loan means you may spend more time with your car in “negative equity.” This is when the car’s cash value is less than the balance of the loan

Get Used Car Financing Today at Straub Nissan 

Need more help with your used car purchase? The team at Straub Nissan can help you figure out what to look for in a used car, including determining what’s good mileage for a used car. What’s more, our financing team can help you find the auto loan that will work with your budget! Contact us today to learn more!