How Long Does it Take to Pay off a Car?

Loan lengths are different, but the exact length of your loan was stated in the original loan contract as required by federal law. Loans may be 24, 36, 48, 60, 72, 84, or even 96 months. At the end of 2012, the average new car loan was over 60 months, so it took five years to pay off a car! Consumers typically opt for longer loan lengths in order to lower their monthly payments. This may seem great, but there are drawbacks, mainly that you will pay more in interest by the time you’ve paid off the loan. To find out how much more you will pay, have a look at our calculator. Additionally, a longer loan means you’ll face negative equity for a longer period.

Preparing for Your Loan

You do not have to take on a 60 month note if you are able to plan for a car loan. First, request your credit reports from the major agencies. You can get them for free at this link: Correct any errors that you find there. Next, you should look at this link ( to discover how FICO builds a credit score. After seeing how a credit score is built, you should address any areas where you are falling short. If you do not have a credit history or have poor credit, you can obtain a credit card to establish a history of on-time payments. If you are denied for ”normal” cards, try a secured credit card. Do not waste your time with a pre-paid or reloadable card. They are not reported to the major credit reporting agencies and will not boost your score. Once you have a card, charge $25 a month, then pay the entire balance in full less than 30 days later. Do that for six months and you will have a credit history and a history of on-time payments.

If you already have a credit card or still have a low score after obtaining one, then you may need to look for specialized financing. There are plenty of options on-line, so you may need to spend some time looking for the company that will offer you the most favorable terms. There are a few caveats that you need to be aware of. Specialized loans for low credit scores come with the cost of a higher interest rate and shorter loan lengths.