How Long Can You Finance a Used Car?

If you are purchasing a new car in the Manchester area, the average auto loan term is about 60 to 72 months. Your car loan length depends on how much you can afford to pay on a monthly basis. If you are shopping for a pre-owned vehicle, you may be wondering about the average length of a used car loan. So, how long can you finance a used car? We cover used auto loan term length and more in the guide below. 

Average Length of a Used Car Loan

There’s no set limit on the maximum amount of time to repay a car loan. However, banks and other financial institutions may follow specific guidelines. For example, there are banks that have a policy prohibiting financing on vehicles over seven years old with more than 100,000 miles on the odometer. We recommend that you reach out to your preferred lender to learn about its requirements for used car financing. 

Why Choose a Short-Term Loan? 

Advantages of a Short-Term Loan:

• Low Interest Expenses: By having a higher monthly payment, you end up paying less in interest. 
• Faster Pay-Off: You can take care of the loan quickly. 
• Refinancing: Refinancing in the future is easier with a short-term loan. 

Disadvantages of a Short-Term Loan: 

• Higher Monthly Payment: You will be required to pay more each month. 

Why Choose a Long-Term Loan?

Long-Term Loan Pros: 

• More Affordable Monthly Payment: You are required to pay less every month for a longer period of time, which could be helpful if you are on a tight budget. 

Long-Term Loan Cons: 

• Higher Interest: You end up spending more in interest over time. 
• Vehicle Depreciation: The longer the length of the auto loan, the more time your car will spend as “negative equity.” This is when the car is worth less than the balance of the loan. 

Finance Your Next Used Car with Tulley BMW of Nashua! 

Tulley BMW of Nashua has the largest selection of pre-owned BMW vehicles in the country, so you are sure to find a vehicle that exceeds your expectations but not your budget. Contact us today for more information or check out our car buying tips.