How Long Can You Finance a Used Car?

Are you shopping around Oceanside for used cars? One of the questions you may have is, “How long can I finance a used car?” According to the statistics, the average loan term when financing a used car is between 60 and 72 months. Take a moment to learn about the differences between short-term and long-term loans, so you decide which option is best for you. Then, apply for financing and contact Quality Chevrolet to schedule some test drives in Escondido! 

Long- vs. Short-Term Loans: Pros & Cons 

So, how long can you finance a used car? As we mentioned earlier, the average loan term for Poway drivers is between 60 and 72 months. However, when financing a used car, some banks put a 7-year cap on loan term length. Also, bear in mind that it may be difficult to find a loan on a vehicle with over 100,000 miles on the odometer. With that out of the way, let’s take a moment to compare the perks of a short-term loan to the perks of a long-term loan: 

Pros & Cons of Short-Term Loans

Pros: 

• Less Interest: If your loan term is shorter, there will not be as much interest overall compared to a longer loan. What’s more, by opting for a short-term loan, you may be able to barter for a lower interest rate. 
• Faster Buyout: You’ll pay your loan off much more quickly. 

Cons: 

• Higher Monthly Payment: Your monthly payments reflect the sum of the principal of your loan and interest divided by the number of months for your loan term. A shorter loan term is going to mean higher monthly payments. 

Pros & Cons of Long-Term Loans

Pros: 

• Lower Monthly Payment: With a long-term loan, you’re dividing the total loan by a greater number of months, meaning that you’ll make much lower payments each month. 

Cons: 

• More Interest: You pay interest each month on your loan as a lending fee. If your loan is longer, you’re going to pay more interest over your loan term.
• More Depreciation: As cars age, they lose value. If you plan on selling your car, but you have a long loan term length, you’re at a greater risk of developing negative equity. Negative equity is when you owe more on your car loan than it is worth in the marketplace. This could put you in a position where you’re still paying off a portion of the car loan, even after selling your vehicle. 

Discuss Financing a Used Car Near Carlsbad 

You know how long you can finance a used car for, but the real answer to the question, “How long can I finance a used car?” is to determine which loan length is right for your needs. If you have more questions about the pros & cons of financing a used car with a long- or short-term loan, call Quality Chevrolet at (760) 871-4005. We can answer any of your questions and help you navigate the rest of the steps of used car shopping. And while you’re here, take a moment to explore our guides on what to look for in a used car and what to do after buying a used car!