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How many years is a car loan for?
I want to shop around for car loans, but I'm not sure what the length should be. How many years does a car loan last? What's the best term?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Good question!
Car loans
vary greatly in length, ranging from as short as 12 months to as long as 120 months. However, the best term for you depends on your own circumstances.Finance experts usually agree that either 48- or 60-month loans are the best choice, as they balance monthly payments with better interest rates. However, you have to weigh the pros and cons yourself. Some of the pros of a 60-month plan include:
- Lower monthly payments
- Refinancing options later down the line
However, there are also cons, including:
- Higher interest rates
- More interest paid over the life of the loan
- Car fatigue, or wanting to get a new car before your car is paid off
- Going upside down on the car loan
The pros of a 48-month plan are:
- Less interest paid
- Lower interest rates
- Quicker positive equity
The cons of a 48-month plan include:
- Higher monthly payments
- May not be worth it to refinance later in the loan
Since you’re deciding to finance a car, don’t forget that you’ll need full coverage car insurance for it. To make sure you get the best deal on the coverage you need, go to the
Jerry
app—we’ll get you personalized quotes from top insurers, so that all you need to do is pick the plan that works best for you. And once you pick, we’ll help you switch!View full answer
- Gregory R.
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