How Long Can I Finance a Used Car?

If you ever wondered, “How long can a finance a used car?” you’re not alone. The average auto loan term around Mansfield is between 60 to 72 months, and it will likely keep going up as car prices continue to increase. Your auto loan length will depend on what you can afford to pay per month. So, how long can I finance a used car? Read on to learn more about the maximum length to finance a used car, as well as the pros and cons of shorter and longer loan terms, and reach out to our finance team with any questions!

Maximum Amount of Time to Repay an Auto Loan

There isn’t a set limit on the maximum amount of time to repay an auto loan, but banks do follow some guidelines. Certain banks around Lexington have a policy on used car financing that prevents financing vehicles over seven years old and with over 100,000 miles on them. Check with your preferred lender and ask about any restrictions on used car financing.

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

Short-Term Loan Pros:

• Lower Interest: One of the most significant advantages of a short-term loan is less interest paid over time. That’s because you’ll have a shorter loan duration and a higher monthly payment to pay it off sooner.
• Faster Pay-Off: The higher monthly payment will help you pay the loan off faster.
• Refinancing: If you choose to refinance your loan later on (assuming your credit score is strong enough), it’s an easier process with a short-term loan because your car will be less likely to get “upside down.”

Short-Term Loan Cons:

• Higher Monthly Payment: Short-term car loans come with a higher monthly payment than longer-term car loans. Make sure to run the numbers and be certain that a higher monthly payment works with your Shelby budget.

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

Long-Term Loan Pros:

• More Affordable Monthly Payment: The biggest advantage of a longer loan term is that you’ll pay less every month. If your financial situation ever changes, you’ll have some flexibility.

Long-Term Loan Cons:

• Higher Interest: With longer-term auto loans come a higher interest rate. The longer the loan, the more interest will accrue.
• Vehicle Depreciation: All cars depreciate over time (unless they are a classic model). Still, depreciation ratesslow down somewhat as the car ages. The longer the auto loan, the more time your vehicle may be in a “negative equity” situation. Negative equity (or being upside down) is when the car’s cash value is less than the balance you still owe on the loan.

Finance a Used Car at Spitzer Kia Mansfield Today!

Now that we’ve answered to the question, “How long can I finance a used car,” are you ready to move forward with used car financing at Spitzer Kia Mansfield? If so, browse our extensive selection of pre-owned cars at Spitzer Kia Mansfield near Ashland. Our finance specialists will help you secure a fair interest rate and get you a payment you can afford. Feel free to apply for financing online and contact us today for all of your automotive needs!