What's the optimal length for a car loan?

I want to get a car loan that balances low monthly payments with a decent interest rate. What's the best length for a car loan for my needs?

Answer
According to most personal finance experts, the optimal length for a car loan is 48 months, although some are upping this length to 60 months due to the increased cost of vehicles and lower interest rates.
By getting a 48-month car loan, you lower your interest rate compared to lengthier terms and you also pay less interest over the life of the loan. In addition, you can avoid car fatigue, which is when you’re ready for a new car but stuck paying for an old one.
The only downside to a 48-month loan is that your monthly payments will be more than for a longer term, so you’ll need to budget accordingly. But the longer loan term you choose, the more interest you’ll end up paying in the long run.
Speaking of your budget, don’t forget to budget for full coverage car insurance, as your lender will require it. By using the Jerry app, you can compare rates from over 50 top carriers and find the best savings hassle-free.
Eric Schad
Answered on Nov 17, 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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