When you are purchasing a vehicle, one of the most important decisions that you are going to make is the length of your vehicle loan payments. That's because the length of your vehicle payments will have a big effect on your monthly budget as well as your overall vehicle cost. Therefore, you may be wondering what vehicle loan lengths are available. Here's a look at how long you can take to finance a new or a used vehicle. 

Auto loan terms are getting longer

The first thing that you should know is that the overall length of vehicle financing is getting longer. In fact, 60% of vehicle buyers are financing their vehicle purchases between 60 and 84 months. These are five to seven-year loans. Therefore, if you are looking to finance your vehicle for the long term, you have the option to go as high as seven years. 

What's the longest auto loan that you can get?

There is no strict rule as to how long an auto loan needs to be. However, most vehicles are designed to last about 100,000 miles before they have major issues. Therefore, most lenders are not willing to finance a new vehicle past 100,000 miles. Since the average person drivers about 15,000 miles per year. A seven-year financing option is going to be about the longest auto long-term that you will find. 

What are the advantages of long auto loan terms?

You may be wondering if a short-term or a long-term financing loan is best for you. Here's a look at a couple of reasons why you may want to consider long term financing for your vehicle purchase: 

  • Lower monthly payments - A longer financing term will break up your loan into more payments. Therefore, you will be able to pay less each month. If you are on a budget or you don't want to make large monthly car payments, then a long-term loan is right for you. 
  • Lower down payment required - Also a long-term loan will not require a big down payment. That's because you will have much more time to pay off the vehicle. Therefore, you should consider a long-term loan if you don't have 20% to put down on a vehicle. 

What are the disadvantages of long auto loan terms?

While there are several advantages to getting a long-term auto loan, there are also some disadvantages. Here's a look at why long-term auto loans may not be best for you. 

  • More interest - The longer your loan term, the more interest that you have to pay. Therefore, if you want to keep the overall cost of your vehicle lower, they will not want to consider a long-term vehicle loan. 
  • Depreciation - Over time, your vehicle will depreciate. There is a possibility that you will become "upside down" on a vehicle with a long-term loan. That means that you will owe more than what the vehicle is worth. 

What are the advantages of short auto loan terms?

If you are considering a short-term loan, then you will want to learn about the many advantages that you can have by paying off your vehicle earlier. Here's a look at what a short term vehicle loan offers: 

  • Lower interest costs - You don't have to pay as much in interest when you finance your vehicle for the short term. This will lower the overall cost of your vehicle. 
  • Finish paying off your vehicle faster - If you want to own your vehicle outright faster, then you will want to opt for a short-term loan. 
  • More chances to refinance your vehicle - Since you are less likely to be upside down on your vehicle, you will have more opportunities to refinance the loan if interest rates go down. 

What are the disadvantages of short auto loan terms?

Along with the many advantages of having a short-term loan, there are some disadvantages. Here are a couple of reasons to reconsider a short-term auto loan. 

  • Higher monthly payments - When you take out a short-term loan, you will have to make higher monthly payments. This can cause stress on your budget. 
  • Little room for mistakes - With the short loan term and higher monthly payments, there is less room for error on your budget. If you have to have a spending emergency, then it could be harder for you to make that higher monthly payment. 

Use the 20/4/10 Rule to decide how long to finance your vehicle

Not sure if you should take out a long-term or short-term loan for your vehicle? Then you should consider the 20/4/10 Rule. With this rule, you put down 20% of the value of the vehicle with payments for four years that are no more than 10% of your annual gross income. 

For instance, let's say that both adult members of the household work and have a combined income of $90,000. The household has $10,000 that they can put down as a down payment. That would allow the family to put 20% down on a $40,000 vehicle and finance the other $30,000. Throughout four-year financing at a 4% interest rate, the car payment will come out to $725 per month. The annual cost of the vehicle payments would be $8,700 which would be less than 10% of the annual household income of $90,000. This would be a doable loan financing term using the 20/4/10 rule.  

Get your next vehicle at the Glockner Family of Dealerships

Get a great deal on your vehicle, along with excellent financing options, at the Glockner Family of Dealerships. We have dealership locations all over the Ohio, West Virginia, and Kentucky areas. Our team can help you get into the vehicle of your choice with favorable short-term and long-term loans. Visit our nearest dealership today to see what we have to offer. 


Glockner Family of Dealerships

2901 US Highway 23
Directions Suite A
Portsmouth, OH 45662

  • Sales: 740-351-2900
  • Service: 740-353-2161
  • Parts: 740-353-2161


  • Monday 9:00am - 6:00pm
  • Tuesday 9:00am - 6:00pm
  • Wednesday 9:00am - 6:00pm
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  • Saturday 9:00am - 5:00pm
  • Sunday Closed