How Long Can You Finance a Used Car?

If you’re starting the shopping process around Detroit and Royal Oak, you might be wondering just how long can you finance a used car? While the average auto loan term is about 60 to 72 months, it’s expected to increase as car prices rise. Some lenders have loose restrictions on the loan term maximum, so find out what you need to know moving forward with your car purchase – and start shopping used cars at Ray Laethem Buick GMC, Inc.!

Maximum Amount of Time to Repay a Car Loan

While it varies from lender to lender, you’ll find that some banks have a policy on used cars that prevents duyers from financing vehicles over seven years old and with over 100,000 miles on their odometers. How do you know if this applies to you? Contact your preferred lender to ask. This can help you narrow down the field.

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

Short-Term Loan Pros:

• Low Interest Expenses: A shorter loan term mean fewer payments total over time, which means less total interest overall. 
• Faster Pay-Off: Shorter loan terms take less time to pay off, which means you’ll free up funding quicker than a long-term loan. 
• Refinancing: Because you spend less time being upside down on your loan, it’s much easier to refinance down the line if you have strong credit. 

Short-Term Loan Cons: 

• Higher Monthly Payment: A shorter loan means monthly payments are higher, so it’s important to make sure you have the funding to cover that – while maintaining a safety net in case of unexpected expenses. 

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

Long-Term Loan Pros: 

• More Affordable Monthly Payment: When you spread out the loan payment over a longer period of time, it means each individual monthly payment is less than the a short-term loan – which can be easier on your budget.

Long-Term Loan Cons: 

• Higher Interest: The longer you pay off your loan, the more total interest you’ll need to pay over time.
• Vehicle Depreciation: Though used cars have lower depreciation rates than new models, all cars lose value over time. The longer the length of the auto loan, the more time your car will spend as “negative equity” – which is when the car’s cash value is less than the balance of the loan. 

Find Affordable Financing Solutions at Ray Laethem Buick GMC, Inc.! 

So, how long can I finance a used car at Ray Laethem Buick GMC, Inc.? Chat with our finance experts in Detroit to find out! We can help you find the right pre-owned car for your Farmington Hills commute, and we’ll help you find a financing solution that works for your needs and budget. Contact us with questions and apply for financing at your convenience.