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How long is a car loan on average?
I’m getting a car loan, but I can’t decide how long of a term to choose. My friend said shorter is better — 60 months or less — but I like the low payments of a 72- or 84-month loan. In addition, my buddy said loans that long are rare. So what’s the average car loan length?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
In August 2021, Nerdwallet produced statistics on the average
car loan
length and how it’s increased in recent years. According to that report, the average car loan is 70.9 months with the most popular term being 72 months.Prior to about 2016, 60 months was the most popular length. However,
72-month
and 84-month loans have become more popular due to low monthly payments and record-low interest rates.If you decide to go with a 72- or 84-month loan, make sure to weigh the pros and cons of each before you decide to sign the contract.
Pros of 72- or 84-month loans
- Lower monthly payments
- More financial flexibility
- The ability to pay toward the principal as you see fit without giving up low monthly payments
Cons of 72- or 84-month loans
- Full coverage insurance required for six or seven years
- Warranty can run out before the car is paid off
- More interest paid over the life of the loan
- Higher interest rates
- Buying a car you can’t afford
If you decide to go with a 72-month or 84-month loan, that doesn’t mean it’s a bad idea. Just put your financial goals and budget ahead of the wants or a car you can’t afford.
Regardless of which loan length you choose, make sure that you get the best price on your full coverage auto insurance with the Jerry app.
As a licensed broker,
Jerry
helps you find and compare quotes from over 50 top providers in minutes. When you find a great rate, Jerry can help you buy your new coverage with ease. With the extra money you save, you can pay your car loan off early! View full answer
- Gregory R.
WHY YOU CAN TRUST JERRY
Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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