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What is the average car loan length?
I was going to get a 72-month loan, but my father said I shouldn’t get a loan any longer than 48 months or I can’t afford it. To settle the argument, what’s the average car loan length in the U.S.?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
The average
car loan
length has shot up to 70.9 months, with the most popular term being 72 months. In 2020, 72- and 84-month car loans comprised over 70% of all loans, despite never being more popular than 48- or 60-month loans before 2016.Your father isn’t necessarily wrong, though. Most personal finance experts agree that you shouldn’t get a car loan longer than 48 months. But with interest rates at record lows, many consumers are going with longer terms. So if you’re intrigued by a longer loan length, such as
72 months
, make sure to weigh the pros and cons.Pros of 72-month loans
- More financial flexibility
- You can pay more toward the principal
- Lower monthly payments
Cons of 72-month loans
- Higher interest rates
- More interest paid over the life of the loan
- Warranty can run out before the car is paid off
- Full coverage insurance required for six years
If you decide that the financial flexibility and lower monthly payments are higher on your priority list, a 72-month or longer loan isn’t necessarily a bad idea as long as you know the downsides. But if you pull the trigger, just make sure to get the best rate on your car 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.
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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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