How Long Can You Finance a Used Car?

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If you’re shopping for a pre-owned vehicle in the Elk Grove area, you might be wondering, “How long can I finance a used car?” Well the short answer is, an average of 60 to 72 months. But there are some restrictions that you need to know when it comes time to how long you can finance a used car for, depending on how much you can afford to pay on a monthly basis.

 

 

Learn more about the financial options with the finance department of Kareem Auto Sales Inc below. If you have any questions about term lengths and loans, then contact us today and we’ll make sure to answer all of your questions.

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 around Roseville and Folsom 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 best to contact your preferred lender and ask about their restrictions on used car financing before taking the next step.

What Are the Pros & Cons of Short-Term Loans?

Short-Term Loan Pros:

  • Low-Interest Expenses: A shorter loan term will come with a higher monthly payment, but you’ll pay less interest over time.
  • Faster Pay-Off: The higher monthly payment will allow you to pay off the loan faster.
  • Refinancing: If your credit score is strong, you may have the opportunity to refinance your loan later down the road. Generally, it’s easier to do this with a short-term loan, because your loan 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.

What Are the 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, so you’ll have some leeway if your financial situation changes at any point.

Long-Term Loan Cons:

  • Higher Interest: Long-term loans come with higher interest rates. The longer the loan term, the more interest accrues.
  • Vehicle Depreciation: Cars depreciate over time, although depreciation rates slow down as a car gets older. That being said, 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.

Find Your New-To-You Model Today at Kareem Auto Sales Inc

Used cars are a great way to save yourself plenty of money, while still getting many of the latest features, and that’s where the experts at Kareem Auto Sales Inc come in. You can apply for financing online, and our finance department will help take care of the process for you. Don’t worry about how much paperwork there is, instead find the best deals out there around Folsom on a used car from Kareem Auto Sales Inc. You can also browse our selection of car buying tips for even more ways that we can make the car buying process easy.

 

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