Your loan term is an important part of the auto loan equation. The longer you take on a loan for the smaller your monthly payments are likely to be, but you also pay more in interest charges. It may not be as easy to make smaller payments for longer as you might think.
Typically, car loan terms come in increments of 12 months, and they're always stated as a number of months, not years. No one who gets a five-year car loan sees "five years" on their paperwork, but they would see 60 months. Standard loan terms are 36, 48, 60, and 72 months.
Lately, however, more and more manufacturers are offering loans that extend to 84 months and beyond. Here's what we know about car loans with the longest terms.
The Longest Car Loan Terms Available Today
Typically, the longest loan term you're likely to see through a franchise dealership is 84 months. However, there are places online and other lenders who may offer loan terms as long as 108 months. This is a long stretch, but sometimes this is the only way to make a vehicle affordable for a customer.
This is because the longer you stretch your loan term, the lower your monthly payment will be. The issue is that doing this adds more interest to your loan, and you could end up in a negative equity situation where you owe more for the vehicle than it is worth.
Mostly, when you see loans of eight years or longer, they typically come from a credit union, though some manufacturers' captive lenders, like GM Financial, also offer longer loan terms, as well, like a 96-month loan. Getting a loan this long might not be in the cards if your credit is too low. The higher interest rate, coupled with the long loan term, could price you out of a vehicle anyway.
Why Are Loan Terms Getting Longer?
One reason loan terms are getting longer is that vehicles are getting more expensive. In fact, affordability is the main reason for borrowers to stretch their loan terms.
There are many things that have recently impacted the price of vehicles, making them less affordable. Things like the new 25% tariff on imported vehicles and parts have made prices go up by a few hundred to a few thousand dollars per vehicle.
That, combined with the federal interest rate levels, is impacting borrowers where it hurts -- their wallets. With the average rate for a new car sitting around 7% (6.8% in Q2 2025, according to the Experian State of the Automotive Finance Market report), longer loans may be the only way some consumers can even think about getting a vehicle.
Pros and Cons of Long Car Loan Terms
Longer loan terms have advantages and disadvantages. Just like other lending situations, it's important to weigh your pros and cons carefully.
Pros of the Longest Car Loan
Getting the longest loan you can has its pros, but the main advantage is a lower monthly payment. The longer you stretch your loan terms, the lower your monthly payment will be. However, the longest loan term will come with considerably more interest charges
Cons of the Longest Car Loan
The disadvantages of long-term car loans come down the road from your initial purchase. The longer you stretch your loan, the more you pay in interest, and it can add up quickly. Here's a look at how interest rates can affect your loan during the loan term:
Let's assume you're taking out a $30,000 loan with a 13% interest rate as a bad credit borrower.
| Loan Term | Monthly Payment | Total Interest Rate | Risk of Negative Equity |
| 60 months | $682.59 | $10,956 | medium risk |
| 72 months | $602.22 | $13,360 | high risk |
| 84 months | $545.76 | $15,844 | very high risk |
| 96 months | $504.22 | $18,405 | very high risk |
| 108 months | $472.61 | $21,042 | very high risk |
In this example, we're not assuming a down payment. But in the real world, a down payment of around 20% makes your risk of negative equity lower. That would be $6,000 down, and it would knock down all your monthly payments and interest charges even farther. However, a loan for the longest loan term still costs you more than half of the cost of the car in interest alone.
Consumer Behavior Trends
With each year that car prices rise, longer loan terms become more and more of a necessity. The percentage of new car buyers choosing 72+ month loans is on the rise, according to Experian. The majority of loans are over 70 months on average, and only those borrowers with the very best credit are taking on shorter loans, though they are still averaging loans of 64 months or longer.
According to Experian's State of the Automotive Finance Market report, we can see that loan terms have increased across the board from a year ago. The current average loan term for a new vehicle is nearly 69 months.
Credit scores run from 300 to 850, with Deep subprime being the lowest category, and Super prime being the highest. Here are the average loan terms by credit score for both new and used car loan situations.
Average new vehicle loan terms by credit score range:
- Deep Subprime: around 73 months
- Subprime: around 74 months
- Near Prime: around 75 months
- Prime: around 72 months
- Super Prime: around 65 months
Average used vehicle loan terms by credit score range:
- Deep Subprime: around 64 months
- Subprime: around 66 months
- Near Prime: around 68 months
- Prime: around 69 months
- Super Prime: around 66 months
Long-Term Risks and Financial Pitfalls
There are many pitfalls you could find yourself in when you take on the longest loan terms. Mostly, these have to do with getting rid of the vehicle or being able to use it as a trade-in. When you take on a long loan term, you may end up with negative equity, which means the car is worth less than you owe on the loan.
This could mean that you have to roll negative equity into your next loan, and you could have trouble selling the car.
Car loans with the longest terms are also more likely to be defaulted on, since it can get to a point where you're paying for a vehicle that you know isn't worth it, or one that may not be in top condition, or even drivable, depending on your situation.
The Bottom Line
When you take on a loan that's higher than you can comfortably afford, it's common to stretch your loan term to make monthly payments more affordable. This may seem like a good idea, but the longer you make your car loan, the more interest you will pay.
Your best bet to keeping a car loan affordable is to take on the lowest loan possible, for the shortest amount of time. If you can't afford your loan, stretching out your loan term isn't your only option. You could also try refinancing to a lower rate to help save money overall.
