lightbulb
Short answer
A longer loan lowers the monthly payment but raises total interest. On $24,000 at 6.5%, 72 months costs $5,048 in interest against $3,320 at 48 months, a difference of $1,728.
1. Same loan, different terms
A $24,000 loan at 6.5% APR (the amount financed on a $30,000 car with 20% down), next to what a fixed $400 monthly payment can borrow.
| Term | Payment on $24,000 | Total interest | Loan a $400 payment supports | Price with $8,000 down |
|---|---|---|---|---|
| 48 months | $569 | $3,320 | $16,867 | $24,867 |
| 60 months | $470 | $4,175 | $20,443 | $28,443 |
| 72 months | $403 | $5,048 | $23,795 | $31,795 |
| 84 months | $356 | $5,936 | $26,937 | $34,937 |
2. What it shows
- Going from 48 to 72 months cuts the payment from about $569 to about $403 but adds about $1,728 of interest.
- A $400 payment supports about $6,900 more loan over 72 months than over 48 months.
- Longer terms make a pricier car look affordable, but the extra interest and the longer time in debt are the cost.
3. Which term to choose
- 48 months or less if the payment fits the 10% rule.
- 60 months if you need a lower payment, but check the total car cost.
- 72 months or more only with a large down payment, because you may owe more than the car is worth for longer.
4. Frequently asked questions
Is a 60-month car loan too long?expand_more
It is common, but it goes beyond the 4-year limit of the 20/4/10 rule and adds interest compared with 48 months.
How much more does a 72-month car loan cost?expand_more
On $24,000 at 6.5%, about $1,728 more interest than a 48-month loan.
Does a longer term let me afford a more expensive car?expand_more
On paper it does, because the payment is lower, but you pay more interest and stay in debt longer.
What term does the calculator use by default?expand_more
48 months, the strict 4-year cap. You can change it to 36, 60 or 72 months.