How long can you finance a used car?

Purchasing a used car doesn’t always have to be a cash-only transaction; you can also apply for a used car loan and make monthly payments. Continue reading to learn more about the loan terms available.
When purchasing a used car, it is important to be safe. That is why PrivateAuto offers an end-to-end platform to get the deal done. With instant payment transfers and secure messaging, you’ll never have to compromise your privacy. We also offer in-app vehicle financing through our integrated banking partner.

What is a Loan Term?

A loan term is the amount of time you will have to repay a loan in full. A lender’s financing agreement and security policies state how long you have to pay back the loan.

Each lender sets their own loan terms, and may offer different loans of varying lengths. Often, a longer-term loan comes with a higher interest rate, while a shorter loan term incurs a higher monthly payment. Loan lengths can be influenced by the amount financed or how much the used vehicle is worth, by the buyer’s credit score, and a number of other factors.

If a buyer has a current car loan that they are still making payments on, that will also influence both the loan term and the interest rate they will qualify for.
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What Is The Longest Loan Term Allowed For a Used Car?

Generally, the longest loan term for used cars is 84 months. However, some lenders will let you extend the loan up to 96 months, depending on the amount financed. The shortest used vehicle loans are around 24 months. 48- and 60-month loans are some of the most common terms.

Pros and Cons of Loan Terms

It’s important to get a good financial education to understand how different loan terms and interest rates will impact your future. Let's take a closer look at the pros and cons of short- and long-term car financing.

Long-term Loan Pros

1. Lower monthly payment
2. Ability to purchase a more expensive vehicle

Long-term Loan Cons

1. Higher interest rate
2. Loan lasting longer than the car
3. Depreciation

Short-term Loan Pros

1. Low-interest
2. Faster pay-off
3. Refinancing

Short-term Loan Cons

1. Higher monthly payment

PrivateAuto Financing

If you are not ready to pay out-of-pocket for your next car, you can apply for a used auto loan right within the PrivateAuto app. When approved, your profile will show that you have verified funds, making you stand out from other buyers.

When closing the deal and sending payment, our lending partner will pay the seller in full. You'll make monthly payments to the lender. It's that easy. Wondering how much your monthly car payment will be? Our car loan calculator will tell you.

What’s the Ideal Amount of Time to Finance a Used Car?

It’s best to keep your loan term to 60 months or even less to avoid paying undue interest over the life of the loan. A long-term loan (such as an 84 month loan) will cost you significantly more over the loan term than a 48 month loan of the same amount.

Ideal term lengths depend on the person doing the car shopping.

1. What monthly payment can they reasonably afford?
2. What is their credit score like?
3. What auto loan amount can they qualify for?
4. What is their monthly cash flow and expenses?
5. What are their long-term financial goals?

Consider The Numbers Before Choosing a Loan Term

It’s best not to base your loan amount on extraneous factors such as what other people are financing. Instead, it’s better to analyze your income, savings and retirement goals, and spending habits (that said, $28,000 is an average amount for used car loans).

To choose the best loan, compare different loan terms and their respective interest rates. Determine the monthly payment for each loan and the amount of interest you will pay over the life of the loan.

Then, choose the loan that has the most favorable combination of:

1. Interest paid over the life of the loan
2. Monthly payment

Experience the PrivateAuto Advantage

Avoid scams, keep personal information private, and guarantee funds with PrivateAuto. Fast, convenient car transactions. Get started today.

Used Car Buying FAQ

How to buy a used car with PrivateAuto?

PrivateAuto makes buying a used car fast and hassle-free. Whether you’re looking for a Ford F-150, Toyota RAV4, Nissan Altima, or Ram 1500, you’re sure to find a great deal.

We are the only end-to-end car-buying platform that gives you everything you need to get the deal done, from making offers to sending payments. And you’ll never have to give out your contact info or compromise your security.

1. Create an account and get verified on PrivateAuto
2. Look for your dream car
3. Make offers
4. Schedule the test drive
5. Complete paperwork
6. Transfer the funds
7. Do the car title transfer
8. Finalize with your state

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