How Long Can You Finance a Used Car?

Finance Agreement

There are many questions you ask yourself when shopping for a used car in Houston. Key questions you may ask include, “How do I buy a used car?” and “How long can I finance a used car?” You’re not alone. When you’re keeping an eye on your budget, the knowledgeable team in the Arriba Motors finance center can help you make an informed decision that fits your budget. 

So how long can you finance a used car? The average auto loan term for a pre-owned vehicle is 60 to 72 months. When determining how much you can afford each month, keep in mind that the longer the term length, the smaller your monthly payments will be. Explore the pros and cons of a shorter or longer term length below, and contact our team at Arriba Motors to find used car financing that works for your budget. 

Benefits of Used Car Financing Term Lengths

How long you can finance a used car can vary depending on the lender you choose. Although there’s no set limit on how long you can finance a car, many banks and auto loan lenders limit used car loans to seven years. Some companies won’t even offer loans on vehicles over 100,000 miles. If you’re seeking loan options outside the average term lengths, be sure to ask about restrictions on financing a pre-owned vehicle.

Advantages and Disadvantages of Short-Term Loans

If shorter-term loans are an attractive option when considering “How long can I finance a used car?” here are a few factors to keep in mind:

Short-Term Auto Loan Pros:

  • Faster Pay-Off: Although short loans have higher monthly payments, you’re able to repay the loan faster and own your car sooner. 
  • Low-Interest Expenses: With a shorter term, you’re less likely to have to worry about higher interest on your loan.
  • Refinancing: During your term length, refinancing can be an option if interest rates drop. 

Short-Term Auto Loan Cons: 

  • Higher Monthly Payment: Be sure your budget can handle the higher monthly payments over the length of the term. You don’t want to put a strain on your budget or affect your credit score by falling behind on payments.

Advantages and Disadvantages of Long-Term Loans

There’s no correct answer to “How long can you finance a car?” A long-term loan may be the best option when you have a changing budget or need more room in your budget. Keep these factors in mind: 

Long-Term Auto Loan Pros: 

  • More Affordable Monthly Payment: For more wiggle room when budgeting your lifestyle around Humble, a longer-term auto loan allows you to pay less each month. You can always make a higher monthly payment when you can repay it faster.

Long-Term Loan Cons: 

  • Higher Interest Rates: Higher interest rates are often associated with long-term loans, and you’ll also pay more interest by the time the loan has come to an end. 
  • Vehicle Depreciation: You should also consider the value of the vehicle during the loan. Although depreciation rates slow down as the car ages, you risk ending up with negative equity with long-term loans. Negative equity is when the value of your vehicle is less than the balance you owe. 

Explore Your Financing Options with Arriba Motors!

You have financing options when shopping for a pre-owned vehicle from Arriba Motors. From used cars priced under 35k to financing a car with bad credit, we aim to get you on Sugarland-area roads in a model that fits your budget and driving needs. If you have questions about how long you can finance a used car, don’t hesitate to contact us. 

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