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5 Reasons to Say No Thanks to 72 and 84 Month Auto Loans

72 or 84 Month Auto Loans

Having a brand new car is incredible; however, you may look at the total cost and payment and feel it is unrealistic for you now. A 72 or 84 month auto loan will give you a chance to pay lower monthly fees than the shorter-term loan. However, having a cumulative seven years of paying your car loan is not an excellent idea.

Before taking a long-term auto loan, it is vital to understand various risks and options available. It’s also important to ask yourself whether an auto loan is secured or unsecured? All of these factors come into play when calculating the total amount you will be paying over the course of your loan. It never hurts to be thorough.

Alarming Car Buying Statistics

Auto loans that exceed 60 months are not an ideal way for financing a car, as they carry a high car loan interest rate. However, Experian Data indicates that in the first quarter of 2021, 32% of the new car buyers took a loan of between 72 and 84 months. But are all of these buyers really getting the best deal?

Dealers extend the loans instead of reducing the actual selling price of the car. Used car financing follows a similar path, and the results can be worse. Buying a three-year-old car with an 84-month loan makes it ten years old to complete the loan. It doesn’t feel right still paying a loan of a ten-year-old car, especially when you may be wanting a new car by then anyway.

An auto loan 401k allows you to borrow money and return on interest. Dealers consider the monthly payment and not the overall cost of the vehicle on the long-term loan. However, your qualification to take a long-term loan does not necessarily mean that you should take them.

Five Reasons to Refuse Long Loans

1) You Are Immediately Sunken

This is a state where you owe more than the car’s actual worth because fees, taxes, interest, and more go to the long car loan. If you need to sell the vehicle shortly, you can’t get what you owe. If your car ends up in an accident and is eventually written off, insurance will not pay the loan.

2) It Creates a Negative Equity Cycle

A long-term monthly loan creates a situation where you owe more than what the car is worth. An increase in the loan amount increases the debt amount. If you need to trade your vehicle with another one before the end of the loan term, you would not avoid rolling your negative equity in the initial vehicle into the new loan. It is hard to break out of that cycle. 

3) You May End up Paying More Interest

Lower monthly payment is okay; however, it is vital to look at the loan’s interest. Many years of car loan repayment result in more resources you can otherwise utilize for other valuable activities.

However, the 656 credit score auto loan rate offers loans at more reasonable interest rates. For example, while financing a car loan of between 61 and 66 months, the average interest rate is 4.1%. However, if the loan term increases to 72 months, the interest rate jumps to 6.6%. A 629 credit score auto loan would offer higher rates than these, of course.

4) You Will Be Suffering Due to Car Repairs and Loan Payment

A seven-year-old car will have traveled many miles; so, the old vehicle will require new tires, brakes, repairs, and other maintenance costs. By going for a long-term auto loan, you may be locking yourself into driving a car long past the point it is economically feasible.

5) Figure Out the Excess Interest You Will Pay

Interest is money you won’t be getting back as value and, usually, is not tax-deductible. Therefore, it is vital to look at the effect of extending the loan on your long-term costs. While a low-interest rate may be appealing at first, you will likely end up paying far more over the full period of your loan.

Four Strategies to Turn the Tables

There are numerous alternatives to 72 and 84-month car loans that can help you save money in the long run. We’ve compiled a list of four possible options below:

Leasing a Car

Leasing a car from the car dealer is a suitable option rather than taking a 72 or 84-month car loan. The car payments come along with its depreciation while driving instead of with the actual purchase price. Leasing has lower monthly payments and saves on cost.


It is tempting to take a long-term monthly loan and get the car of your dreams. However, downsizing financially and acquiring a cheap car is an effective option instead of paying off many years on your car loan. Acquiring a less expensive car is one easy way of ensuring the monthly car payment is attainable.

Purchase a Used Car

Having a used car gives you financial freedom despite not being as alluring as a new car. Used cars help you to save money right off the bat by reducing your initial costs.

Save and Issue a Large Down Payment

Issuing a sizeable down payment will enable you to lower the monthly payment. It is advisable to take time and save a significant quantity for a down payment as this will assist you in taking a short-term loan and enjoying a lower monthly price.

With a shorter loan term, you will enjoy your car selection and avoid buying a car whose value will start depreciating as soon as you start driving it off.


Before deciding on a long-term auto car loan, make sure you consider the effect of cost on your budget and financial goals. Even if you pay the smaller monthly payment on a 72 and 84-month car loan, in the end, you will end up paying more interest. You may also pay more than the actual car’s worth and other repairs in your vehicle.

Featured Image: Megapixl

About the author: I am a writer and an editor with experience in publishing, research, and SEO strategies. I have an honors BSc in Social Work from the University of Benin, Nigeria.

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