How Long Do Car Loans Usually Last?

Posted: Wednesday, November 27th, 2019

When using a car loan to purchase a vehicle in the St. Louis area there are a number of factors to consider, including your car loan length. Find out the average car loan length and how that impacts your financing at Green Light Auto Credit.

How Long is the Average Car Loan?

When asking the question, “How long does a car loan last?” you are going to get multiple answers. While auto loans can vary, the average car loan last 72 months, or about six years. Yet, the average length of car ownership is only 79 months. Meaning drivers only go 7 months in between paying off their vehicles and starting a new car payment.
Happy Green Light Auto Credit customer with car

Other Car Loan Lengths

While 72 months may be the average, there are other car loan length options:

  • 24 months
  • 36 months
  • 48 months
  • 60 months
  • 72 months
  • 84 months

Keep in mind that loan lengths can vary by credit score. The avarage new-car loan length for drivers with credit scores ranging from 781 to 850 is about 63 months. Meanwhile, for those with not-so-great credit, the average car loan length for a new car is about 72 months. Whether you’re looking for a short term or long term loan, there are a variety of financing options out there around St. Charles and Florissant.

What’s the Average Car Loan Interest Rate by Credit Score?

Like loan lengths, car loan interest rates can and do vary depending on credit score. Naturally, borrowers with higher credit scores typically gain access to lower interest rates, while borrowers with lower credit scores can usually expect higher interest rates. Here’s a quick look at the average interest rates on auto loans per credit score:

  • 500 to 589: 15.24%
  • 590 to 619: 14.06%
  • 620 to 659: 9.72%
  • 660 to 689: 7.02%
  • 690 to 719: 4.95%
  • 720 to 850: 3.60%

There’s also a relationship between the average car loan interest rate and loan term. Long-term auto loans come with lower monthly payments but higher interest rates, while short-term loans come with higher monthly payments and lower interest rates throughout the loan term:

  • 36-Month Loan Term: 3.71% Interest Rate
  • 48-Month Loan Term: 3.81% Interest Rate
  • 60-Month Loan Term: 3.93% Interest Rate
  • 72-Month Loan Term: 3.78% Interest Rate

Long-Term vs. Short-Term Loans

When looking at the length of your loan, you will need to weigh the advantages and disadvantages of short term vs. long terms car loans.

  • Short-Term Loans: While short term loans mean a larger monthly payment, they cost you less in interest over the length of your loan.
  • Long-Term Loans: These loans spread your payments out over a longer period of time which leads to lower monthly payments. The flip side to long term loans is that borrowers will pay much more over time in interest.

When making financing decisions, be honest with yourself about your car budget, from monthly payments to the total cost of your vehicle loan.

Secure a Car Loan Today at Green Light Auto Credit

Need help finding the right car loan for your situation? The experts at Green Light Auto Credit can go over all your options to find a loan to match your needs. Contact us today to take the first step in purchasing your next vehicle!