What’s the average car loan length?

Rebecca Betterton

Thu, September 17, 2026 at 5:50 PM GMT+3 6 min read

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Key takeaways

A longer loan term means you'll have a lower monthly payment, but you'll also pay more in interest.
A shorter loan term helps minimize borrowing costs and the risk of being upside-down on your loan.
Consider the monthly payment and overall cost of ownership when determining which auto loan term is best for you.

Your loan term is the amount of time it takes for you to repay a loan, and it may also affect the auto loan rates you receive. On average, drivers financing a new vehicle had a car loan length of 69.46 months in the second quarter of 2026, while used borrowers had a term of 67.86 months, according to Experian's State of the Automotive Finance Market.

The longer your loan term, the cheaper your monthly payments will be. However, if you have debt with higher interest rates, such as credit cards, you may consider a longer loan term to focus on paying down other balances.

What car loan terms can you expect?

Terms typically range from 24 to 84 months, although some lenders offer terms up to 96 months. Data from Experian shows that consumers with lower credit scores tend to opt for longer loan terms — likely to take advantage of lower payments — though most loans are for between 60 and 72 months.

Source: Experian State of the Automotive Market, Q2 2026

Borrowers with excellent credit can expect to have the best selection of loan terms with the most favorable interest rates because lenders typically view these loans as less risky. A lower credit score will limit the loan terms available to you.

How long should you finance a car for?

Your loan term should be based on the amount you can afford each month. Aim to pay as much as you can reasonably afford to cut down on the total cost of your loan, but depending on your credit score and other factors, you may decide that a longer loan term suits your needs despite the higher interest costs.

Determine your budget. Consider both your monthly budget and how much you want to pay for the car itself. The general rule of thumb is to spend no more than 20% of your take-home pay on an auto loan payment.
Shop for preapproval. Most lenders allow you to apply for preapproval without undergoing a hard credit check with the initial application. This allows you to browse vehicles — usually within 30 days of preapproval — and have financing ready to go so you can act like a cash buyer.
Calculate borrowing costs. Once you have an idea of the interest rate you're likely to receive, plug it into an auto loan calculator to view your estimated loan payment. You can also view the amortization table to see how much you will pay per month along with your total interest costs for each loan term.
Make a decision. Consider both the monthly payment and the overall cost when deciding which loan term best suits your needs. You may also want to take into account other policies or overall customer satisfaction to choose the best auto loan.

Learn more: Is your car payment too expensive for your monthly budget?

How does the car loan term affect cost?

As mentioned, the longer your loan term, the more interest you will pay. If you opt for a short loan term, you'll have higher monthly payments but spend less overall.

This example assumes a $40,000 auto loan with a 6.5% interest rate. The shortest term of 36 months will cost you just over $4,000 in interest, while the longest term of 84 months will cost nearly $10,000.

Your wallet might appreciate the decreased monthly payment that a long-term loan offers, but the trade-off may not be worth the thousands of dollars you will pay in interest.

Long-term vs. short-term car loans

If you aren't sure which term is best for you, consider how the loan will impact your finances. A longer repayment period gives you a lower monthly payment. But this benefit comes at a cost. You'll pay more in interest over the loan term than you would if you choose a shorter term.

Pros and cons of a long car loan term

If you're leaning towards a long-term car loan, here are some benefits and drawbacks to consider to make an informed decision.

Pros
- Lower monthly payment: If your budget is tight, a longer term could make your auto loan payment more manageable.
- Increased affordability: You may be able to afford a higher-priced vehicle if you opt for a long-term loan.
Cons
- Higher borrowing costs: The lender has more time to collect from you, so you'll pay more in interest.
- Risk of being upside-down on your loan: You could find yourself owing more than your vehicle is worth, which is particularly problematic if you plan to sell or trade your vehicle in the near future.
Pros and cons of a short car loan term

Short-term auto loans also come with key advantages that could make them a better choice for some borrowers.

Pros
- Lower borrowing costs: A shorter loan term means lower interest costs over the loan term.
- Ownership timeline: Paying the car off over a shorter timeframe also means you'll own it outright much sooner, potentially avoid the negative impact of depreciation and free up room in your budget.
Cons
- Higher monthly payment: You can expect a steeper monthly payment that can limit you to lower-priced vehicles.
- Potential budgetary constraints: If you don't have much wiggle room in your budget, taking on a loan with a shorter term can be risky, especially if you don't make a sizable down payment.

Bankrate tip

For some, a long-term loan might be the only way to afford a car. If this is your situation and you have a low credit score, compare multiple lenders to find the best car loan rates for bad credit.

Bottom line

The average car loan length ranges between 24 and 84 months. The right terms for your needs ultimately depend on how much you can afford to pay each month.

Although a shorter term can save you a bundle, it may not be the best fit to finance the car of your dreams. But if you can find a less expensive, comparable model, the compromise may be well worth it in the long run.