60 vs 72 month car loan: which costs less?

A worked example

Take a $25,000 loan at 7% APR. These figures are an illustration, not an offer, and your own rate will differ.

• 60 months (5 years): about $495 a month, about $4,702 in total interest.
• 72 months (6 years): about $426 a month, about $5,688 in total interest.

The 72 month loan is roughly $69 a month cheaper, but it costs about $986 more overall.

Which one to choose

Pick the shortest term whose payment fits your budget comfortably. A longer term can leave you owing more than the car is worth for longer, and you pay interest for an extra year. A 72 month loan makes sense only if the lower payment is truly needed.

Run your own numbers

Enter your own amount, rate and term in the auto loan calculator to compare 60, 72 and other terms. To compare two loans side by side, use the loan comparison tool. Always check the official figures from your lender before you sign.

Why a longer loan costs more

Interest is charged on the balance you still owe. With a longer term, the balance falls more slowly, so you pay interest on a larger amount for more months. The lower payment feels easier each month, but the extra months add up. If you can afford the 60 month payment, you will usually finish owing nothing sooner and pay less in total. Making an extra payment toward the balance now and then can also shorten either loan, if your lender allows it without a fee.

Frequently asked questions

Is a 72 month car loan a bad idea?

Not always, but it costs more interest and keeps you in debt longer. It can work if the lower payment is needed and you understand the extra cost.

Does a longer term change the interest rate?

Lenders sometimes charge a higher rate for longer terms. Ask for the rate on each term, because the real cost depends on both the rate and the number of months.

How do I compare two loan offers?

Compare the APR, the term, the monthly payment and the total you will pay. A loan comparison tool shows the total cost of each offer side by side.