How Long can I Finance a Used Car?

Are you among those asking the question how long can I finance a used car? Owning a car is no longer seen as a luxury because of how much they contribute to our lives. Asides from improving our mobility, they can also be used for businesses like Uber. The challenge is that new cars are getting costlier by the day.

This leaves us with the option of purchasing used cars. Are you planning to purchase a used car and you don’t have the funds to do so? Then you must be thinking, “How long can I finance a used car?” If you have this question on your mind, we will answer it along with others in this post.

Explaining Loan Term

One question that constantly pops up when financing cars is being discussed is “what is a loan term?” It is important for us to discuss this before moving ahead to how to finance a used car.

A loan term, in simple words, is how much time you are given to repay a loan completely. In other words, it the amount of time that the lender agrees for you to complete paying off the loan. Usually, the loan term is specified in the agreement that you have with your lender. For used vehicles, the loan term could be expressed in years or months.

How Long Can I Finance a Used Car?

Another way to ask this question is, “what is the loan term for a used car?” Whichever way you ask the question, it still boils down to how much time you have to repay your used car loan.

The loan term is determined by the lender. They fix the maximum and the minimum number of years or months for a used car loan to be offset.

After surveying the market, we can tell you that 84 months or 7 years is about the maximum you would get. In some cases, it is possible for the lender to extend the financing to between 92 and 96 months. The minimum financing period for used cars is somewhere around 24 months or 2 years.

Pros of Choosing a Longer Used Car Financing Period

There are certain benefits that you enjoy when you choose a longer financing period for a used car. We have outlined some of them in this section.

Reduced monthly payment

This is the biggest benefit of settling for a longer loan term for used cars. Since the payment period is spread over a longer period, you end up paying lower amounts per month. With this, it is easier for you to make payments each month. A longer financing period comes in handy when you have a strained budget and don’t want things to get worse.

Higher purchasing power

Another important advantage of a longer loan term is that it gives you a higher purchasing power. What does this mean? With a longer financing period, you have access to more funds that can be offset at small amounts per month. So even if you are on a tight budget, you can get more funds without pushing beyond your limits.

Cons of Choosing a Longer Used Car Financing Period

Choosing a longer loan term to finance a used car is not all good news. There are a few challenges that you should consider as well. Here are some of them:

Higher interest rate

This is one of the biggest downsides of longer loan terms for used cars. The longer you have to pay the loan, the higher the interest that will be charged per month. In the end, the cost of servicing the loan becomes very high, and for some people, unreasonable.

Depreciation issues

One of the biggest challenges with cars is depreciation, especially when the depreciation comes very fast. If this happens, you could lose a lot more on the vehicle than you bargained for. This is because your loan could exceed the actual worth of the vehicle by the time you are done paying.

The loan can outlast the car

The loan outlasting the lifespan of the car is a possibility that you must consider. In some cases, the car may break down beyond repair or the repair costs may be higher than its value. When this occurs, you have to seek another loan to finance purchasing another car while paying up the current loan.

Can I Finance a Car Older than 10 Years?

This is another very common question among people that want to purchase used cars. To be honest, no bank will finance a used car loan for a car older than 10 years. It doesn’t matter if your credit is good or not. The good news is that there are other ways to finance a used car aside from the bank.

One of the ways is to finance through a dealership indirectly. This option allows you to finance a used car older than 10 years. Depending on your locality, you may find other financing options. The general restrictions are:

  • Vehicles should not be older than 10 years old.
  • They shouldn’t exceed 100,000 miles.
  • The loan should not be lower than $5,000.

These are general guidelines. Different financiers have different restrictions such as minimum financing amount, car age, mileage, etc.  Whatever the case is, ensure that you have good credit before trying to finance a car.

What are the Steps to Finance a Used Car?

There are seven steps involved when you want to finance a used car. We will outline them below:

Step 1: Understand the language of lending. This includes all the terms related to the process such as loan term, principal, interest, down payment, etc.

Step 2: Know your credit score and find out why it matters.

Step 3: Seek out a suitable financing deal. The fact that a financing deal is good doesn’t make it suitable for you. Screen the market well before deciding.

Step 4: Submit your loan application.

Step 5: Check the offers from the financing dealerships.


Step 6: Conclude the deal.

Step 7: Do everything necessary to pay back the loan.


That’s it for how long you can finance a used car. If you have any questions, share them with us in the comments section.

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