Many or all companies we feature compensate us. Compensation and editorial research influence how products appear on a page. Auto Loans Are 72- or 84-Month Auto Loans Worth It? Pros, Cons, and Costs Updated Oct 31, 2024 2-min read Expert Approved Expert Approved This article has been reviewed by a Certified Financial Planner™ for accuracy. Written by Jess Ullrich Written by Jess Ullrich Expertise: Banking, insurance, investing, loans Jess is a personal finance writer who's been creating online content since 2009. She specializes in banking, insurance, investing, and loans, and is a former financial editor at two popular online publications. Learn more about Jess Ullrich Reviewed by Erin Kinkade, CFP® Reviewed by Erin Kinkade, CFP® Expertise: Insurance planning, education planning, retirement planning, investment planning, military benefits, behavioral finance Erin Kinkade, CFP®, ChFC®, works as a financial planner at AAFMAA Wealth Management & Trust. Erin prepares comprehensive financial plans for military veterans and their families. Learn more about Erin Kinkade, CFP® Longer-term auto loans (72 or 84 months) can offer lower monthly payments, but they often come with higher total costs and increased risks. If affordability is a priority, they might be an option—but shorter terms usually save you money in the long run. Table of Contents Skip to Section Are 72-month auto loans a bad idea? Are 84-month auto loans a bad idea? How to switch to a shorter loan termWhen might a 72- or 84-month loan make sense? Are 72-month auto loans a bad idea? A 72-month auto loan might seem appealing with its lower monthly payments, but it often comes with trade-offs. Here’s a breakdown of potential pros and cons: Pros Manageable payments A longer term can make your monthly payments more manageable Finance a higher-value vehicle A longer term could let you afford a more reliable vehicle that holds value. Cons Higher rates Interest rates tend to be higher for longer repayment terms. Slower repayment You’ll build equity more slowly if you stretch out the repayment term. More risk of negative equity The longer term increases your chances of owing more than your car is worth, which can limit your options if you want to sell or trade in the vehicle. Example: Payments on a 72-month vs. 60-month auto loan Let’s say you finance a $35,000 used car with a $10,000 down payment. With excellent credit, you’d qualify for these estimated terms: TermRateMonthly paymentTotal interest paid60 months7.00%$495.03$4,70272 months7.25%$429.23$5,905 By choosing a 72-month term, you’ll pay $1,203 more in total interest, making the car more expensive over time. Are 84-month auto loans a bad idea? An 84-month loan stretches payments even further, but we don’t recommend it unless you’re committed to keeping the car long-term. Consider these factors: Lower payments: Monthly payments will be lower, which can help if your budget is tight. Higher costs and risks: You’ll pay more in total interest, face a higher likelihood of negative equity, and may deal with significant repair costs as the car ages. Example: Payments on an 84-month vs. 60-month auto loan For the same $35,000 car and $10,000 down payment: TermRateMonthly paymentTotal interest paid60 months7.00%$495.03$4,07284 months7.75%$386.55$7,470 In this example, an 84-month loan costs $2,678 more in interest than a 60-month loan. How to switch to a shorter loan term If you already have a 72- or 84-month loan but want to shorten your term, here are two ways to do it: Make extra payments: If your loan has no prepayment penalties, make additional payments to reduce your balance faster. Consider refinancing: Look into refinancing for a shorter term with a lower rate, especially if interest rates have improved since you took out the original loan. Just keep potential fees in mind; they could offset the savings. When might a 72- or 84-month auto loan make sense? In some cases, a longer-term loan might work if it enables you to purchase a dependable vehicle without straining your budget. Here’s a quick guide: If…Consider a 72- or 84-month term?You need lower monthly payments✅You can afford a higher monthly payment❌You plan to keep the car long-term✅You want the lowest possible interest rate❌You plan to sell or trade the car soon❌ Are longer auto loans worth it? If keeping payments low is a priority and you’re committed to the car long-term, a 72- or 84-month loan could work. However, shorter loans generally save you money in interest and reduce the risk of negative equity.