How Long Can You Finance a Used Car?

Shopping for a pre-owned vehicle in the Stamford area? If so, you might be wondering, “How long can I finance a used car?” The average auto loan term is 60 to 72 months. That being said, there are some restrictions on how long you can finance a car, and your car loan length will depend on how much you can afford to pay on a monthly basis. So, how long can you finance a used car? Learn more about your used car financing options in this guide from the finance team at BMW of Greenwich in Greenwich

Maximum Amount of Time to Repay a Car Loan

While there is no set limit on the maximum amount of time to repay a car loan, there are a few guidelines that banks follow. For example, 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. It’s a good idea to contact your preferred lender and ask about their restrictions on used car financing before taking the next step. 

Pros & Cons of Short-Term Loans

Short-Term Loan Pros:

• Low-Interest Expenses: You’ll pay less interest over time because you’ll have a shorter loan term and a higher monthly payment. 
• Faster Pay-Off: With the higher monthly payment associated with a short-term loan, you’ll be able to pay the loan off faster. 
• Refinancing: Assuming your credit score is strong, you may have the option of refinancing your loan later down the road. Generally, it’s easier to do this with a short-term loan, because your car will spend less time being upside down. 

Short-Term Loan Cons: 

• Higher Monthly Payment: The higher monthly payment of a short-term auto loan could have a negative impact on your budget. Make sure that you are financially able to meet your monthly payment obligations. 

Pros & Cons of Long-Term Loans

Long-Term Loan Pros: 

• More Affordable Monthly Payment: A longer loan term allows you to pay less every month for a longer period of time. This will give you some leeway if your financial situation changes at any point. 

Long-Term Loan Cons: 

• Higher Interest: Long-term loans come with higher interest rates since more interest accrues over the length of the loan term. 
• 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’s cash value is less than the balance of the loan. 

Explore Your Used Car Financing Options at BMW of Greenwich! 

How long can I finance a used car? Since there is no hard-and-fast rule on how long you can finance a used car, you should seek out a loan term that fits your budget. The finance specialists at BMW of Greenwich will be happy to help you learn more about used car finance rates in CT, so you can make an informed decision. You can also take advantage of our convenient online shopping tools to calculate your monthly payments and get pre-approved for financing. Just make sure to browse our current pre-owned vehicle specials, and feel free to contact us if you have any questions.