How Long Can You Finance a Used Car?

Auto Loan Term Length Trends

The average repayment term for a used car loan is 67.2 months, according to Experian's State of the Automotive Finance Market report from the fourth quarter (Q4) of 2024.

The most popular loan terms by a significant margin are in the range of 61 to 72 months, followed by 73 to 84 months. However, roughly 3 in 10 used car buyers opt for shorter terms of 60 months or less. Here's a look at how used car loan terms are distributed.

Used Auto Loan Term Distribution by Length

How Long Can You Finance a Used Car?

Used car loan terms can range anywhere from 12 to 84 months, or even longer in some cases. However, 36 to 72 months are more typical options.

Your options may be limited depending on a few factors:

• Credit score: Long-term loans tend to be riskier for auto lenders, so if you also have a lower credit score, you may only have access to shorter terms.
• Vehicle age and mileage: Older vehicles with high mileage pose more of a risk of breaking down, so you can generally expect shorter repayment term options. Some lenders may not even be willing to finance vehicles more than 10 years old.
• Loan amount: If you're making a sizable down payment—either in cash or with a trade-in—or you're buying a relatively inexpensive model, it may not make sense for the lender to spread the loan across a longer period.
• Lender: Each lender has its own policies for setting repayment terms. While some may be more flexible, it's important to choose a lender that offers terms that work for you.

Pros and Cons of a Long-Term Auto Loan

Long-term auto loans offer some advantages, but they can ultimately be costlier over time. Here are some benefits and drawbacks to keep in mind.

Short-Term vs. Long-Term Auto Loans

As you evaluate your loan repayment options, it's important to run some numbers to determine which one is best for you. One way to do this is with an online car payment calculator.

Here's a general comparison between short- and long-term auto loans, particularly in terms of how they might impact your financial situation.

How to Get the Best Used Car Loan

If you're gearing up for a used car purchase, here are some tips to help you ensure you get the best possible deal on your financing:

• Shop around for loans. While it may be tempting to rely on the dealer to arrange your financing, you may be able to get a better offer on your own. Plan to get preapproved with at least a few lenders so you can compare rates, terms, fees and other features.
• Improve your credit. Register with Experian to get free access to your Experian credit report and FICO^® Score^☉. You can use these resources to evaluate your credit health and identify areas where you can make improvements to your score.
• Put more money down. Larger down payments reduce the risk that the lender takes on with the loan and may result in a lower interest rate. Keep in mind, though, that depleting your savings for a car purchase could make you vulnerable to financial emergencies, so keep some cash on hand as a buffer.

Where Consumers Are Buying Used Car Loans

A variety of financial institutions offer used car loans, and it can be worthwhile to check rates with multiple types of lenders to find the best deal. Here's a quick look at where people generally get financing for used cars.

• Banks: You can get a car loan with a wide range of national, regional and community banks. Some banks may even offer interest rate discounts to eligible existing customers. That said, banks tend to charge higher interest rates than credit unions.
• Credit unions: Credit unions are not-for-profit organizations owned by their members, which means that profits are often returned in the form of lower interest rates on loans, among other benefits. That said, you typically need to qualify for membership before you can join, which can be a hurdle for some.
• Captive finance lenders: If you're buying a certified pre-owned vehicle, you may be able to get a loan from a captive finance lender, which is another name for the manufacturer's lending division. Captive lenders sometimes offer incentives, such as lower interest rates, but the trade-off may be shorter repayment terms.
• Finance companies: The term "finance company" may refer to any non-bank auto lender. For example, some online lenders specialize in auto loans but don't offer other financial products and services. These lenders may have more flexible eligibility criteria and lower rates, but that's not always the case.
• Buy here, pay here dealers: Buy here, pay here (BHPH) financing is a type of in-house financing offered by independent dealers. These loans are appealing to borrowers with low credit scores or no credit history because they often don't require a credit check. However, the costs can be extremely high, and many dealers don't report on-time payments to the credit bureaus.

Used Car Loan Origination Share by Lender Type and Dealer Type

Maintain Good Credit to Maximize Your Savings on a Used Car Loan

Whether or not you're planning to buy a car soon, it's a good idea to build and maintain a good credit score so you'll have access to favorable financing options when you need them.

With Experian's free credit monitoring tool, you can keep track of your progress and get insights into steps you can take to improve your credit habits. You can also get real-time alerts when changes are made to your credit report, making it easier to address potential problems before they wreak havoc on your credit health.