How Long Can You Finance a Used Car?

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In recent years, the average auto loan term has reached 60 to 72 months around Turnersville and is expected to keep climbing as car prices increase. There are few regulations on how many years you can finance a used car or used SUV. The length of an auto loan depends on how much the buyer can afford to pay every month. So, back to the common question, “How long can you finance a used car?” Learn more about the maximum term length on auto loans here and the pros and cons of shorter or longer loans. Don’t hesitate to reach out to our finance team with any questions.

Maximum Amount of Time to Repay a Car Loan

There’s no set limit on how many years you can finance a used car. But there are some guidelines that the banks follow. Some lenders have a policy on preowned cars that prevents buyers from financing any vehicle over seven years old and with over 100,000 miles on the odometer. Check with your preferred lender and ask about any restrictions on used car financing before you start shopping around Williamstown.

Pros & Cons of Short-Term Loans

Short-Term Loan Pros:

  • Faster Pay-Off: You’ll pay off the loan faster.
  • Low-Interest Costs: You will pay less interest on a short-term loan over the years.
  • Refinancing: It’s easier to refinance your loan later (assuming you qualify). It’s typically easier with a short-term loan because you’ll gain equity faster and reduce the risk of getting upside down on your loan (negative equity).

Short-Term Loan Cons:

  • Higher Monthly Payment: The shorter the loan term, the higher the monthly payment, So be sure a higher monthly payment works with your budget.

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

Long-Term Loan Pros:

  • Lower Monthly Payment: When your Sicklerville lender approves you for a longer loan term, you’ll have a lower payment than with a shorter-term loan.

Long-Term Loan Cons:

  • Vehicle Depreciation: Cars depreciate, although depreciation rates slow down as the vehicle ages. The longer the length of your auto loan, the more risk you’ll have negative equity, which is when the car’s value is less than what you owe on it.
  • Higher Interest: Long-term loans have higher interest rates, meaning you will pay the principal balance off much slower and pay more interest.

Finance Your Next Used Car at Cadillac Of Turnersville!

Now you know the answer to your question, “How long can I finance a used car?” When you’re ready to apply for financing and find your next vehicle, we invite you to contact us at Cadillac Of Turnersville Our team will take you for a test drive around Mullica Hill and explain all of your financing options. You can also use our online value your trade tool to get an estimated value for your trade-in. While you’re here, take a moment to check out our guide on how credit scores correlate with interest rates!

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