Is a 60-month car loan bad?

I’m shopping around for a car loan and I want to balance a decent interest rate with low monthly payments. I’ve read that 48 months is the optimal car loan length, but the 60-month option seems to fit my budget a bit better. Is there anything wrong with getting a 60-month car loan?

Answer
Until the past two or three years, 60-month car loans were the most popular among consumers. However, many buyers are pushing out the loan to 72 or 84 months due to super low interest rates. With that said, a 60-month car loan isn’t bad if it fits your budget and financial goals.
You should weigh the pros and cons of a 60-month car loan before you sign the contract.
Pros of a 60-month car loan:
  • Lower monthly payments compared to the 48-month car loan you mentioned
  • The ability to refinance in the future if you want to lengthen or shorten your loan
Cons of a 60-month car loan:
  • A comparatively higher interest rate and more interest paid compared to a 48-month loan
  • The possibility of heavier depreciation and going upside down on your car loan for longer
Even with these pros and cons, don’t look at a 60-month car loan as bad. If it fits your budget, it’s a much better option than a 72- or 84-month loan.
Keep in mind that your lender will require full coverage car insurance for the duration of the loan. Plan and budget accordingly by comparing car insurance rates on the Jerry app. As a licensed broker, Jerry helps you find and compare quotes from over 50 top providers in minutes. When you find a better rate, Jerry can help you buy your new coverage and even cancel your old policy!
Eric Schad
Answered on Dec 07, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
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