Auto Loans

The Temptation of the 6-Year Car Loan

Being able to get the car of your dreams is easier than it used to be. Simply by adding one or two more years of payments to your car loan, will make it more affordable than it used to be. Of course, you need to have good credit and income, but a 6-year car loan may be just what you need – or is it? For some, it may be too tempting to pass it by.

A Lot of Interest

Six years, or 72 months, is a long time to pay interest on a car loan. This much interest is really going to raise the overall price of your car, and it will surely take away any price break you received when you bought it. Ideally you want to keep the repayment period as short as you can afford, which will enable you to enjoy the greatest savings. says that the interest rate on a 6-year car loan is typically higher than it would be on a 36- or 48-month auto loan. The shorter loans may even have 0% APR, or single-digit interest rates, but on a longer one, you may actually be paying double the interest rate.

Inviting Negative Equity Situations

When payments are made over a long time, and because cars depreciate fast, says that you are not paying enough money monthly to equal the rate at which it depreciates. This causes the owner to owe more than the car is worth. While this is not apt to be a problem for you if you plan on keeping the car for a long time, it will be if you are planning on selling it. When doing so, you will not be able to get enough to pay the loan off because the car is not worth as much as you still owe on it.

If you decide to trade it in for another car while you have negative equity on it, the new dealership may offer to add it on to your new car loan, says When you do this, it often gets added to the loan but is not paid down until the first loan is totally paid for. Of course, this means you will be paying even more for the first car.

If the Car Is Wrecked, You Could Still Be Paying for a Long Time

If anything should happen to your car, you could easily end up having to continue to pay on the debt for years. This could also make it very hard to get a new car, and you would not be able to use the car you are still paying for. Most people do not keep a car for six years, and if you traded it in, you could still be paying on it.

The best way to get a good deal on a car loan, whether it is a 6-year car loan or another one, is to be sure that you understand what to watch out for when dealing with a car salesman. Start by knowing what your credit score is before you go, because they will often tell you that it is lower than what it really is in order to raise your interest rate. Then, make sure you understand all terms and fees that are applied, and be prepared to say no to at least some of them.

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