How Long Can You Finance a Used Car?

Are you searching Savoy for a pre-owned vehicle and wondering, “How long can I finance a used car?” You’re not alone. Many Decatur drivers are keeping a close eye on their budget, and the longer you can finance it, the smaller your monthly payment will be. The average auto loan term for a pre-owned vehicle is 60 to 72 months, and the loan length keeps going up as auto prices go up. The length of your auto loan depends on what you can afford to pay each month, and our payment calculator can help you estimate your monthly payment. Learn more about financing a used car here with Serra Champaign Automotive.

Financing a Used Car

How long can you finance a used car? There’s no firm limit on the length of a used car loan, but some Bloomington lenders place restrictions on auto loan length. Some banks limit used car loans to seven years and won’t offer loans on a vehicle with more than 100,000 miles. Check with the lender you’re considering to ask about restrictions on financing a pre-owned vehicle.

Pros & Cons of Short-Term Loans

Short-Term Auto Loan Pros:

• Faster Pay-Off: Because your monthly payment is higher, you will repay the loan faster. 
• Low-Interest Expenses: You’ll likely get a lower interest on a shorter-term car loan. 
• Refinancing: If you qualify, you can always refinance your auto loan later if interest rates drop. 

Short-Term Auto Loan Cons: 

• Higher Monthly Payment: The shorter the auto loan term, the higher your monthly payment will be. Be sure you can afford a higher monthly payment and that it won’t strain your Danville budget. 

Pros & Cons of Long-Term Loans

Long-Term Auto Loan Pros: 

• More Affordable Monthly Payment: When you opt for a longer-term auto loan, you’ll pay less every month than if you had a short-term loan. You can always make a higher monthly payment to repay it faster.

Long-Term Loan Cons: 

• Higher Interest Rates: Long-term auto loans offer higher interest rates, and the longer the car loan, the more interest you’ll pay overall.
• Vehicle Depreciation: Cars depreciate as they age, but depreciation rates slow down as they age. The longer the loan length, the more risk you have of ending up in a negative equity situation, which is when your car’s value is less than the balance you owe. 

Finance a Used Car With Serra Champaign Automotive Today

Now that you understand the answer to the common question, “How long can you finance a used car?” trust Serra Champaign Automotive for all of your auto needs. Remember, we take all the hassle out of financing a used car with our simple online credit application. You can also use our Value Your Trade tool to get an idea of the trade-in value for your current vehicle. We invite you to browse our impressive selection of Certified Pre-Owned vehicles and used models, then contact us to take a test drive!