How Long Can You Finance a Used Car?

Finance Paperwork with Glasses
 

For Medford drivers, the average auto loan term is about 60 to 72 months, and is expected to increase alongside car prices. These restrictions are lenient on how long you plan to finance a car, and your car loan length will depend on how much you can afford to pay monthly. So, how long can you finance a used car? Below, you can learn more about the maximum length to finance a car, along with the pros and cons of longer and shorter loan terms. Our finance team at Klamath Falls Honda has the answers for all questions from Grants Pass drivers!

 

 

Maximum Amount of Time to Repay a Car Loan

There is not a set limit on the maximum amount of time to repay a car loan, but be aware that there are a few guidelines that banks follow: some banks have a policy on used cars that prevents buyers from financing vehicles over seven years old and with over 100,000 miles on their odometers. Before taking the next step, you can always reach out to your preferred lender and ask about their restrictions on used car financing.

What Are the Pros & Cons of Short-Term Loans?

Short-Term Loan Pros:

  • Low-interest Expenses: Shorter loan terms have high monthly payments, but this means you’ll pay less interest over time.
  • Quicker Pay-Off: Paying more on a monthly basis will help you to pay off the loan in a shorter amount of time. 
  • Refinancing: Later down the road, you have the option to refinance your loan if you have a strong credit score. Refinancing is easier to do with a short-term loan since your car will spend less time being upside down. 

Short-Term Loan Cons: 

  • Higher Monthly Payment: Of course, short-term auto loans have a higher monthly payment than long-term auto loans, so make sure you have the proper budget allocated if you choose a short-term loan. 

What Are the Pros & Cons of Long-Term Loans?

Long-Term Loan Pros: 

  • More Affordable Monthly Payment: When you choose a longer loan term, you’re paying less on a monthly basis, giving you leeway if your financial situation happens to change at any point. 

Long-Term Loan Cons: 

  • Higher Interest: Unfortunately, long-term loans have higher interest rates, with the longer the loan term, the more interest that accrues over time.
  • Vehicle Depreciation: Cars depreciate over time, but depreciation rates slow down as a car continues to age. That said, the longer the length of the auto loan, the more time your car will spend as “negative equity,” meaning that the car’s cash value is lower than the balance of the loan.

Finance Your Next Used Car at Klamath Falls Honda! 

Now that you know how long you can finance a used car, are you ready to finance a new-to-you vehicle to get you around Ashland roads? Be sure to check out our pre-owned vehicle specials at Klamath Falls Honda. Our skilled finance team will help you bag reasonable rates and terms on your auto loan. Until then, get started by applying for financing online, then stop by at Klamath Falls to test drive a used vehicle that you’ll adore!

 

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