72-Month vs. 60-Month Car Loan: Which Is Better?

A 60-month auto loan and a 72-month auto loan can produce noticeably different monthly payments and total financing costs.

The better option depends on your budget, interest rate, vehicle price and financial goals.

What Is a 60-Month Car Loan?

A 60-month loan lasts five years.

Compared with a 72-month loan using the same amount financed and APR, the 60-month loan generally has a higher monthly payment because the balance is repaid over fewer months.

What Is a 72-Month Car Loan?

A 72-month loan lasts six years.

The additional year spreads repayment over more months and generally reduces the required monthly payment.

Example

Suppose you finance $30,000 at a fixed APR.

A 60-month loan will generally require a higher monthly payment than a 72-month loan.

However, the 72-month loan generally results in more total interest because the balance remains outstanding for a longer period.

Advantages of a 60-Month Loan

  • Higher monthly payment
  • Faster principal repayment
  • Generally lower total interest
  • Loan is paid off sooner

Advantages of a 72-Month Loan

  • Lower monthly payment
  • More time to repay the balance
  • May fit a tighter monthly budget

The Risk of Choosing a Longer Term

Vehicle depreciation can occur quickly during the early years of ownership.

A longer loan term means you may still owe money on the vehicle after it has experienced substantial depreciation.

This can increase the possibility of negative equity depending on the vehicle, purchase price, down payment and loan balance.

Compare Total Interest

Do not compare only monthly payments.

Compare the total amount paid over the complete loan term.

Calculate Both Options

Use our car loan calculator to compare a 60-month loan with a 72-month loan using the same vehicle price, down payment and APR.

Final Thoughts

A 72-month loan can provide a lower monthly payment, while a 60-month loan can generally reduce the time and interest required to repay the vehicle.

Choose the term based on both your monthly budget and the total financing cost.