● Money & small business
72- or 84-month car loan? What the lower payment costs, by term and rate
Longer car loans are sold on the monthly payment. Here's what the lower payment costs, for $35,000 financed, using the same loan math as our car buying comparison spreadsheet and the free car payment calculator: a fixed monthly payment rounded to the cent, and the balance after each month of interest and payment.
$35,000 at 6.9%
| Term | Monthly payment | Total interest | Still owed after 2 years | after 3 years | after 4 years |
|---|---|---|---|---|---|
| 36 months | $1,079.10 | $3,847.60 | $12,478 | $0 | $0 |
| 48 months | $836.50 | $5,152.00 | $18,702 | $9,672 | $0 |
| 60 months | $691.39 | $6,483.40 | $22,425 | $15,458 | $7,995 |
| 72 months | $595.04 | $7,842.88 | $24,897 | $19,300 | $13,303 |
| 84 months | $526.53 | $9,228.52 | $26,655 | $22,031 | $17,078 |
Going from 60 to 84 months lowers the payment by $164.86 a month and adds $2,745.12 of interest. The bigger difference is how slowly the balance falls: after three years you'd still owe $22,031 on the 84-month loan against $15,458 on the 60-month one, $6,573 more. If you want to sell or trade in the car then, or it's totaled, that balance has to be paid off first, and a car that's worth less than the loan leaves you paying for a car you no longer have.
The rate matters as much as the term
Total interest on $35,000, by term and APR:
| Term | 4.9% | 6.9% | 9.9% |
|---|---|---|---|
| 36 months | $2,706.76 | $3,847.60 | $5,597.56 |
| 48 months | $3,613.12 | $5,152.00 | $7,528.48 |
| 60 months | $4,533.40 | $6,483.40 | $9,515.80 |
| 72 months | $5,467.60 | $7,842.88 | $11,558.08 |
| 84 months | $6,415.36 | $9,228.52 | $13,655.32 |
Lenders often charge more for longer terms. If an 84-month loan comes at 9.9% while 60 months would be 6.9%, the payment still drops, from $691.39 to $579.23, but the interest more than doubles, from $6,483.40 to $13,655.32. Monthly payments by rate:
| Term | 4.9% | 6.9% | 9.9% |
|---|---|---|---|
| 36 months | $1,047.41 | $1,079.10 | $1,127.71 |
| 48 months | $804.44 | $836.50 | $886.01 |
| 60 months | $658.89 | $691.39 | $741.93 |
| 72 months | $562.05 | $595.04 | $646.64 |
| 84 months | $493.04 | $526.53 | $579.23 |
When a longer term can make sense
At a very low promotional rate, a longer term costs little extra interest, and the lower payment frees cash for something that earns more or costs more, like high-interest debt. If you take the longer term, paying extra when you can shortens it: most car loans allow prepayment, but check yours. If the payment only fits on 72 or 84 months, it's worth pricing a cheaper car too: the car payment calculator shows both in a few seconds, and the car affordability calculator starts from your income instead.
The car buying comparison spreadsheet puts up to three cars side by side over the years you'll keep them, with the loan, fuel, insurance, maintenance and resale value.