Lenders Rarely Make Auto Loans Longer Than 84 Months

Experian reports on the length of auto loans in Q4 2015

Shaun Plum
MoneyTips Contributor

Borrowing Automotive Loan

Lenders Rarely Make Auto Loans Longer Than 84 Months
March 10, 2016

Lenders in the auto loan industry may be more willing to finance vehicles for six or seven years, but few are willing to go beyond that. Experian stated in its Fourth Quarter 2015 State of the Automotive Finance Market report that during the fourth quarter of 2015, 42 percent of all new auto loans were for 61 to 72 months. Loans of this length increased by five percent last year and the year ended with an average loan life of 67 months, up one month from 2014.

As far as new loans go, 29 percent of all Q4 2015 auto loans were for six to seven years, making them the second most popular loan option for borrowers. These loans were up twelve percent from the previous year. It was not just the fourth quarter either; loans of between 73 and 84 months accounted for almost 30 percent during all quarters in 2015.

These longer loans do keep monthly payments more manageable for borrowers – at the cost of paying more interest and extending the time it takes to pay off the loans. However, Experian notes that 84 months appears to be the accepted limit on the length of loans at the moment. While there are some lenders who will issue loans with a payback period of longer than 84 months, they are fairly rare.

If you are interested in an auto loan, visit our curated list of top lenders.

Photo ©iStockphoto.com/Tramino

  Conversation   |   9 Comments

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Erin | 03.10.16 @ 18:25
I didn't even know auto loans would go that long. That seems like it would be an awful lot of interest to be paying for a vehicle that might not last much longer (without a lot of upkeep) than the loan. I think I'll stick within our budget and get a shorter loan.
irene | 03.10.16 @ 18:26
I didn't know this. Good info since my son and my mother in law are both in the market for a new (used) car
Elaine | 03.10.16 @ 18:26
Lower monthly payments would be ideal for me and my family. Then maybe we could get us a vechile. One can dream!
Sarah | 03.10.16 @ 18:27
wow. I can understand wanting to have lower payments but the car will be jnk by the time you finish p[aying!
Carla | 03.10.16 @ 18:27
Oh my goodness I couldn't imagine paying on an automobile any longer than 5 years. That is a lot of interest
trish | 03.10.16 @ 18:27
I don't think I have ever heard of anything past 5 years! Not sure I would want to go that long for the interest alone. Won't consider do that, even if that meant lower monthly payments
Steffanie | 03.10.16 @ 18:27
I can't imagine WANTING to go longer on a car loan, but I guess if you desperately need the vehicle you will do anything.
Heather | 03.10.16 @ 18:28
Wow i didnt know they allowed you to take a loan out for that long for a car. When I did lending we did 72 months and I thought that was too long. Yes your payment can be smaller but you are paying so much more in interest.
Nancy B | 03.10.16 @ 18:28
Cars depreciate so quickly I cannot even imagine wanting a loan for longer than 84 months.
$commenter.renderDisplayableName() | 11.29.20 @ 19:15