Average Car Loan Terms Near Six Years: What You Pay

Key takeaways

• New-car loans averaged 68.63 months in early 2025.
• A longer loan can lower each monthly payment.
• But interest has more time to add up.
• Buyers should compare the total paid, not just the monthly bill.

The average car loan is now close to six years, which means many buyers make 68 or 69 monthly payments. An average car loan means the typical time a borrower has to repay a vehicle lender. Long terms can shrink the monthly bill, but they can make the car cost more overall.

Why is the average car loan getting longer?

Cars cost more than they did a few years ago. So, many people stretch payments over more months to make a new car seem affordable. Experian said new-car loans averaged 68.63 months in the first quarter of 2025. Used-car loans averaged 67.22 months.

That is roughly five years and eight months for a new car. It is only a little short of six years. The average car loan for a new vehicle also came with an average monthly payment of $745, according to Experian.

Average loan length, Q1 2025New cars: 68.63 monthsUsed cars: 67.22 monthsEach bar equals loan months. Six years equals 72 months.

A loan term is the time allowed to pay back borrowed money. It may be 36, 48, 60, 72, or even 84 months. An 84-month deal lasts seven years, which is a long time to owe money on one car.

Why can an average car loan cost more than expected?

The monthly payment is not the full price of borrowing. Lenders charge interest, which is the fee for lending their money. When repayment takes longer, interest can build for more months.

Here is a simple example. Imagine borrowing $30,000 at 7% interest. A 60-month loan would cost about $594 each month and about $5,640 in interest. A 72-month loan would lower the bill to about $511, but interest would rise to about $6,800.

Example loan	Monthly payment	Total interest
$30,000 at 7% for 60 months	About $594	About $5,640
$30,000 at 7% for 72 months	About $511	About $6,800

The longer choice saves about $83 a month. But it costs about $1,160 more in interest. Actual offers will differ because rates, fees, and credit records vary.

A longer car loan lowers the monthly payment, but it usually raises the full cost because interest runs for more months.

What is the biggest risk with long car loans?

Cars often lose value quickly, especially in their first years. This can leave a buyer owing more than the car could sell for. That gap is called negative equity. It means selling or trading the car may not clear the loan.

This average car loan trend matters most when buyers want another car early. They may roll old debt into the next loan. Then the new loan starts with extra debt attached.

Federal consumer guidance warns buyers to look past a low monthly offer. Check the annual percentage rate, or APR, too. APR shows the yearly cost of borrowing, including certain lender fees. The Consumer Financial Protection Bureau’s car-loan guide explains the basic terms buyers should compare.

Can average car loan terms work for careful buyers?

Yes, a long term is not always a mistake. A buyer may need room in a tight monthly budget. But the choice should be planned, not rushed at a dealer desk.

First, ask for the out-the-door price. That is the vehicle price plus taxes and dealer fees. Then ask for loan offers at 48, 60, and 72 months. Compare total interest beside each payment.

A larger down payment can help because it cuts the amount borrowed. Even $3,000 down makes a real difference. Buyers can also seek preapproval from a bank or credit union before shopping.

Preapproval means a lender checks what it may lend before you pick a car. It gives you a rate to compare with the dealer’s offer. The Federal Reserve’s consumer credit data also tracks the wider borrowing picture in the United States.

Some shoppers may also compare other ways to get a vehicle. For example, leasing spreads use of a car over a set period, though you do not own it at the end. Our report on Apple’s possible iPhone leasing plan shows why lower monthly prices can be appealing, but readers should still check the full contract cost.

What should buyers do before signing?

Try to choose the shortest loan term that fits your budget. A 48- or 60-month loan usually builds ownership faster than a 72-month loan. Also, avoid adding extras you do not want to the loan balance.

Check whether the loan has a penalty for early repayment. If it does not, paying extra can reduce interest and end the debt sooner. Keep an emergency fund, too, since a car payment lasts through job changes and surprise bills.

The average car loan is a useful warning sign, not a rule everyone must follow. Focus on the car’s full price, your interest rate, and how long you will keep it. A smaller payment feels good today, but a shorter debt can feel better later.

FAQs

What is the average car loan term now?

Experian reported 68.63 months for new cars and 67.22 months for used cars in the first quarter of 2025. Both are close to six years.

How does an average car loan affect my payment?

A longer term usually lowers each payment. But you normally pay more interest by the end because the loan lasts longer.

Why should I compare total loan cost?

Dealers often show the monthly payment first. The total cost tells you how much the car and borrowed money will really cost over time.