When this article first ran in 2013, the alarming news was that banks had begun offering seven- and eight-year car loans. They are now ordinary. Experian’s first-quarter 2026 data puts the average new-vehicle loan at about 69 months and the average used loan at nearly 68. More than 35% of new-car loans ran longer than 72 months, up from about 31% a year earlier, and a small but growing slice went past 85 months. The question is no longer whether a long loan is available. It is whether you should take one.

What each extra year costs

Take the average new-car loan of the second quarter of 2026: $43,610 financed at the average new-car rate of 6.35%. Standard amortization gives:

  • 36 months: about $1,334 a month, $4,401 in total interest
  • 48 months: about $1,031 a month, $5,887 in interest
  • 60 months: about $850 a month, $7,403 in interest
  • 72 months: about $730 a month, $8,948 in interest
  • 84 months: about $644 a month, $10,521 in interest

Stretching from 48 to 84 months cuts the payment by $387 but adds $4,634 in interest, and you are making payments for three extra years. The used-car version is worse because used rates are higher: on the period’s average used loan, $27,852 at 11.19%, going from 48 to 84 months drops the payment from about $722 to $480 while total interest climbs from $6,824 to $12,441. The Federal Trade Commission puts it simply: the longer the loan, the more expensive the deal overall.

The second cost: you buy more car

The interest math is the obvious drawback. The original version of this article argued that the real killer is the second one, and that still holds. A long term makes an expensive car look affordable by the only number most buyers check, the monthly payment. Salespeople know this; the question “what payment are you looking for?” exists so the term can be stretched until the answer fits. That is how people end up car poor: the payment fits, but the car quietly consumes money that should have gone to savings, retirement or a bigger emergency fund. Average payments were $765 for new and $542 for used vehicles in the second quarter of 2026. If yours is far above that, the term is probably hiding the price.

The third cost: years underwater

A long loan pays down principal slowly while the car loses value on its own schedule. On that same $43,610 loan, a 48-month borrower has repaid about 47% of the balance after two years; an 84-month borrower, about 24%. That is the mechanism behind negative equity, and it is why Edmunds found nearly 30% of new-car buyers with a trade-in owed more than the car was worth in mid-2026, by an average of $6,884. Being underwater limits every choice you might make later, from selling to refinancing to replacing a car after an accident. What to do if you are already there is covered in How to Deal When Your Car Loan Is Upside Down.

A related gap: factory warranties end on their own schedule too, and a long loan can outlast them. Then you are paying for repairs and a car payment on the same vehicle at the same time.

Match the term to how long you will keep the car

The one rule that survives every rate environment is this: the loan should end before your ownership does, ideally well before. If you trade cars every four or five years, an 84-month loan guarantees that you will be rolling debt from one car into the next. If you genuinely keep cars for a decade, a longer term is less dangerous, but only if you could afford the shorter one and are choosing the longer one for flexibility, not because the shorter one did not fit.

A practical test: price the car at 48 months. If that payment does not fit your budget, the honest answer is usually a less expensive car, not a longer loan. Sixty months is a reasonable ceiling for most buyers. Beyond that, each additional year is a signal that the price, not the term, is the problem.

If a long loan is the only way

  • Put more down. It shortens the underwater period and lowers the interest on every term.
  • Get the rate first. A pre-approval from a bank or credit union sets the ceiling the dealer has to beat; see how to get the best rate on a car loan.
  • Confirm there is no prepayment penalty and pay extra principal whenever you can. At the same rate, a long loan you pay off in five years costs about what a five-year loan would have.
  • Buy gap coverage from your insurer, not the dealer. Adding it to your own policy typically runs $20 to $40 a year versus a $400 to $700 flat dealer charge.
  • Refinance when your credit improves. Borrowers who refinanced in the second quarter of 2026 cut their average rate from 10.40% to 7.97%, saving about $83 a month per Experian, and you can refinance into a shorter term.

The original rule of thumb here was four years. Rates have changed; the arithmetic has not. Four years is still the sensible target, five is the compromise, and anything longer should make you look harder at the car, not the calendar.