What's the best length of time for a car loan?

I'm in the market for a new car, but I need a car loan. I know that car loans can be several different lengths. What's the best length for a car loan?

Answer
You’re right, there are many different lengths for car loans, and each seems to have some benefits.
That said, personal finance experts agree that your car loan should ideally be at most 48 months for several reasons:
  • Lower interest rates
  • Less chance that you still owe on your loan when you want to sell your car
  • Less interest paid over the life of the loan, which will save you money
Try to avoid the trap of getting a loan 72 months or longer. Sure, the lower monthly payments are attractive, but you may want to get a different car before the term is over. Additionally, with such a long loan, you may end up upside down on your car loan, meaning you owe more on the loan than the car is worth.
Another reason to get a lower length for a car loan is that you’re going to have to keep full coverage car insurance on your vehicle for the duration of the loan. This type of insurance can cost several hundred dollars a month.
As a result, you should definitely shop around with the Jerry app. You can save money by continuously comparing quotes to get the best car insurance rates. Jerry will even send you new quotes each time your policy is up for renewal!
Eric Schad
Answered on Nov 16, 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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