 TITLE: What’s the Average Length of a Car Loan? CONTENT: How Longer Auto Loan Terms Can End Up Costing You More\n------------------------------------------------------\nFor car buyers, the main appeal of longer auto loan payment terms is lower monthly payments. For lenders, the advantage of these \"affordable\" loans is collecting significantly greater amounts in interest: No matter what interest rate you're charged, a greater number of payments likely means you'll be paying thousands of dollars more in interest. And, of course, if you're carrying a high interest rate, the additional amount you pay on a longer-term loan can add up to even more.\nConsider the following comparison of total purchase costs for new cars, based on a fairly moderate interest rate of 9% APR. While the monthly payment on an 84-month loan is roughly two-thirds of that on a 48-month loan, the total interest cost for the longer loan is more than 80% greater.\nSource: Experian\nWhen considering various auto loans offers, calculating the total cost of the vehicle and the total interest you'll pay is straightforward: Multiply the monthly payment by the total number of payments to get the total amount you'll pay on the loan. From that amount, subtract the amount you're borrowing to calculate your total interest cost.\nTo get the total vehicle cost, add the amount of your down payment to the total you'll pay on the loan.\nAlong with this considerably greater expense, there are other drawbacks to long-term car loans, such as the possibility you'll end up owing more on the vehicle than it is worth before the loan period is over. That, in turn, could mean your auto insurance policy wouldn't cover the balance of your loan if the car were totaled in an accident. END