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60-month vs 72-month Auto Loan Comparison (+ the Pros and Cons of Each)
If you’ve come to a fork in the road while deciding between a 60- or a 72-month auto loan, you’ve come to the right place. Both terms are recent fan favorites among borrowers because of their appealing monthly payment amounts. In fact, most recently, the average loan term falls in the neighborhood of 67 months for new and used cars alike—falling in the middle of these two options.
In this article, you’ll find an auto loan comparison of the pros and cons of each loan term to help you make the final decision that’s right for you. As an added bonus, you’ll find helpful tips and alternative strategies along the way (we just couldn’t help ourselves!) and information about finding the best auto financing in Florida.
60-Month Auto Loan Pros & Cons
A 60-month car loan (5 years) offers many pros compared to longer loan terms but comes with a couple of cons to consider:
Pros:
- Better interest rate: A 60-month loan will typically have a lower interest rate than a 72-month loan because the risk for lenders isn’t as high. (Lenders consider long-term loans to be riskier because the longer it takes to pay off the loan, the more opportunity exists for the loan to not be paid back in full.)
- Pay off the loan faster: Of course, you’d pay off the loan a year sooner, so you wouldn’t be spending as much in interest payments as you would with a 72-month loan, and that means you’d save more money. Plus, for that final year, you can use the car payment amount in other ways each month.
- Build equity more quickly: The quicker that the balance of your car loan goes down, the more equity (ownership) you’ll have in your car. While neither 60- nor 72-month car loans get paid down/off rapidly, it happens more quickly with the 60-month option.
Cons:
- Higher monthly payments: The monthly payments for a 60-month loan will be higher than they would be for a 72-month loan because the total loan amount is spread out over fewer months.
- Opportunity costs: When making the higher payment between these two options, you may be putting less money into a savings or retirement account.
72-Month Auto Loan Pros & Cons
A 72-month loan (6 years) may appeal to your “now self”—but maybe not so much for your “future self” for the following reasons:
Pros:
- Lower monthly payments: Many choose a 72-month loan because the monthly payments are lower. Borrowers can get a more expensive car and still stay within their budget.
- Opportunity costs: Borrowers could avoid choosing a more expensive car and use the difference in payments a different way.
Cons:
- Higher interest rates: After 60 months, interest rates for auto loans typically jump because the “risk” level for lenders increases. As previously stated, the longer the loan, the more lenders worry that the borrower won’t pay them back in full.
- Expired warranties & repairs: Most bumper-to-bumper warranties last less than 5 years, so with a long-term loan, you risk covering repairs out of pocket while you’re still making car payments. If your car is totaled and you owe more than it’s worth, your insurance company might not cover the balance (GAP insurance can help address this situation).
Example:
Our auto loan calculator can help to illustrate a comparison. For example, let’s say you’d like to purchase a car that’s $35,000 with a $0 down payment.
For a 60-month loan:
- The monthly payment comes out to be $730.08 with sales tax with an interest rate of 6.74%.
- With the added interest payments, you’ll pay a grand total of $43,804.80 over the life of the loan.
For a 72-month loan:
- The monthly payment comes out to be $636.80 with an interest rate of 7.24%.
- The total payment amount for the life of the loan would be $45,849.60
You’d be paying $93.28 less monthly with a 72-month loan, but you’d be saving $2,044.80 overall with a 60-month loan.
"I purchased a vehicle very recently and SCCU had the BEST interest rate of all other financial institutions."
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So, 60- vs. 72-month car loan—which is better?
Unfortunately, with both loan terms, you’re at a much higher risk of going “upside down,” owing more than the car is worth over the life of the loan due to depreciation. But, if you’d like to hold onto your car for a long time, this may not be an issue. Overall, if you’re choosing between the two, a 60-month loan is better because you’ll pay off the loan faster with a lower interest rate, paying less overall for your car.
If you’d like to make more auto loan comparisons, this article on common car loan terms can help.
Is a 72-month car loan worth it?
Because of the higher interest rates and risk of going upside down, most experts agree that a 72-month loan isn’t ideal. Experts recommend that borrowers take out a shorter loan. For an optimal interest rate, a loan term of fewer than 60 months is a better way to go. Learn more about car loans.
Tips on taking a detour from a longer car loan term:
- Shop around. Many experts agree that it’s best to research before autographing auto loan forms. It also helps to get an auto loan pre-approval beforehand so you have a better idea of the loan amount and monthly payment amounts you qualify for. It’s also good to look for a loan with a low APR (Annual Percentage Rate) to help reduce interest payments.
- Refinance your long-term loan. If you’ve already went through the gate on a long-term loan, there’s still hope. You can look into refinancing your ride, and with good credit, you’re more likely to get a better interest rate. Our auto loan refinance calculator can help you decide if refinancing makes sense.
- Make a larger down payment. It’s good to save at least 10% for a down payment for a used car and 20% for a new car. If you’re not sure if it’s better to get a new or used car, you may find this article to be helpful.
Note: If you absolutely cannot swing a shorter-term loan, and you’re in dire need of transportation, it’s okay to get a long-term loan to free up more cash every month for other necessities. However, it’s a good idea to put down more money on your monthly payments than agreed upon when you can. Just be sure that the additional amount goes towards the principal balance of your loan and that there aren’t any prepayment or pre-payoff penalties.
What credit score do you need to get an auto loan?
Fun fact: it’s a myth that people have just one credit score. The truth is that you have many credit scores! One of the most common scoring models is FICO®, which offers a FICO® Auto Score that takes many different factors into account—with credit utilization having the most impact.
How FICO® categorizes credit scores:
- Exceptional: 800-850
- Very Good: 740-799
- Good: 670-739
- Fair: 580-669
- Poor: 300 to 579
However, it’s important to note that not every lender uses the same scoring model for credit scores, and they have their own categorization methods. Typically, borrowers need at least 661 to qualify for an auto loan. Keep in mind that lenders will also take income heavily into account when reviewing applications. The better your credit scores and income, the better your interest rate will be. If you'd like to improve your credit score, check out these tips.
Pssssst, remember, too, that applying for a car loan can typically involve a “hard” credit inquiry. This means that, with a formal application, lenders reach out to the credit bureaus to get your score. Too many hard hits will raise a red flag for credit bureaus, which can lower your score. Typically, you can apply at a handful of places within a two-week timeframe before it does damage to your credit.
What is a good interest rate for an auto loan?
Interest rates vary based on credit score, term, location, income, debt, loan amount, and type of car you’re buying, to name a few. But, knowing the average auto loan rates can help give you helpful insights when shopping. Visit this article for more information.
| Payment Period | Purchase APR* "As Low As" | Minimum Loan Amount | Payment per $1,000 |
|---|---|---|---|
| Up to 48 Months | 5.74% | No minimum loan amount | $23.37 |
| Up to 66 Months | 6.24% | $10,000 | $17.94 |
| Up to 75 Months | 6.74% | $12,000 | $16.38 |
| Up to 84 Months | 6.99% | $20,000 | $15.09 |
Rates shown are fixed Annual Percentage Rates for vehicle model years 2025 and newer. Rates are subject to change. Your actual rate and terms are affected by your creditworthiness, term selected, vehicle type, and model year. Certain restrictions apply. You may be asked to furnish a down payment. Florida loans are subject to Documentary Stamp Tax. The tax amount is not included in the quoted APR.
Is it better to get an auto loan from your bank or the dealership?
Getting an auto loan pre-approval often puts you in a more powerful negotiating position. SCCU auto loan pre-approvals are good for 30 days, giving you a better idea of how much car you can afford, the interest rate, and monthly payments. With this “ticket” in hand, you’ll have an easier time deciding which car to buy and how much wiggle room you have for additional features.
Rather wait until you’re meeting with a dealer? Be sure to ask for SCCU financing at the dealership for some of the best auto financing in Florida.
Benefits of Credit Union Auto Loans
When it’s time to look at new or used auto loans, also consider the benefits of getting your financing at a credit union—not-for-profit organizations that focus on serving their members (customers). Instead of emphasizing profit making for the financial institution, credit unions focus on the greatest good for its members. This includes offering the lowest auto loan rates for new and used vehicles.
SCCU membership is open to relatives of current members and all who work or live in one of these counties. Plus, we also offer exclusive rates for community heroes.
Best Auto Loans in Florida | Space Coast Credit Union
At SCCU, we make auto loan financing in Florida fast and convenient. You’ll enjoy no application fees, flexible terms9, and low rates8 for new and used vehicles. Learn more about our auto loans here. We invite you to visit our car buying center to estimate your monthly purchase or refinance payment. Apply for an auto loan online, in a branch, or over the phone. Feel free to contact us, and our Team Members will be more than happy to answer any questions you have.
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APR = Annual Percentage Rate
¹CALCULATOR: The information provided by these calculators is intended for illustrative purposes only and is not intended to purport actual user-defined parameters. The default figures shown are hypothetical and may not be applicable to your individual situation. Be sure to consult a financial professional prior to relying on the results.
²TERMS: Terms available up to 84 months for auto loan purchases and auto loan refinances, up to 240 months for boat and RV loan purchases, and up to 72 months for motorcycle loan purchases and are based on your credit quality, vehicle type, model, and year. Our usual credit criteria apply. Your term may be different. Qualified borrowers only.
³RATES: Rates are subject to change. Rates shown are fixed Annual Percentage Rates and are affected by your credit quality, model year, term selected, loan-to-value (LTV), and payment method. Your rate may be different. Qualified borrowers only. Our usual credit criteria apply. You may be asked to furnish a down payment. Rates shown for auto purchases/auto refinances are fixed Annual Percentage Rates for vehicle model years 2025 and newer. Rates shown for motorcycle purchases are fixed Annual Percentage Rates for vehicle model years 2022-2026. Florida loans are subject to Documentary Stamp Tax. The tax amount is not included in the quoted APR.