How Long Can You Finance a Used Car?

The average length of a used car loan is about 60 to 72 months, and it could increase as car prices increase. There are different factors that will impact how long it takes to finance a used car, including how much you can afford to pay each month. So how long can you take to finance a used car? Find out with Land Rover Wilmington, as well as the pros and cons of shorter and longer loan terms. Feel free to contact our finance department if you have any questions.

Maximum Amount of Time to Repay a Used Car Loan

While you don’t have a set limit on the maximum amount of time to repay your car loan, there are some guidelines that banks follow. Some have a policy on used cars that prevents buyers from financing vehicles more than seven years old and with more than 100,000 miles on the odometers. Be sure to discuss these used car financing restrictions before taking the next step in the car buying process.

What Are the Pros & Cons of Short-Term Used Car Loans?

Short-Term Used Car Loan Pros:

• Low Interest Expenses: You’ll pay less interest over time since it’s a shorter loan term, but you’ll have a higher monthly payment.
• Faster Pay-Off: Higher monthly payment helps you pay off the loan faster.
• Refinancing: If you choose, you can refinance your loan later down the road (as long as your credit score is strong). This is easier to do with a short-term loan since your car will spend less time being upside down.

Short-Term Used Car Loan Cons:

• Higher Monthly Payment: Short-term auto loans mean you’ll have a higher monthly payment than long-term loans. Check to make sure that you can afford the higher payment since it can impact your financial freedom.

What Are the Pros & Cons of Long-Term Used Car Loans?

Long-Term Used Car Loan Pros:

• More Affordable Monthly Payment: With a longer loan term, you’re paying less every month for a longer period. If your financial situation changes, you can have some leeway.

Long-Term Used Car Loan Cons:

• Higher Interest: Long-term loans come with higher interest rates; the longer the loan term, the more interest accrues.
• Vehicle Depreciation: Cars depreciate over time, but the depreciation rates do slow down as a car gets older. However, the longer the length of the auto loan, the more time your car spends as “negative equity.” This means that the car’s cash value is less than the balance of the loan.

Learn About Used Car Financing in Wilmington Today

If you have any questions about the length of a used car loan, what’s good mileage for a used car, how CPO vs. used cars compare, or what certified pre-owned means for Land Rover models, don’t hesitate to give us a call.