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Car Loan Term
Definition
The length of time to repay an auto loan, typically 36 to 84 months.
Explanation
Shorter terms (36 months) mean higher payments but less total interest. Longer terms (72-84 months) offer lower monthly payments but cost more in total interest and may leave you upside-down longer.
A 36-month term is ideal financially. 72+ month terms should be approached with caution due to rapid car depreciation.
Example
$30,000 at 6%: 36-month term = $913/month ($2,868 interest). 60-month = $580/month ($4,800 interest). 72-month = $497/month ($5,784 interest).