Car loan term comparison.

Worked example

You finance $30,000 at 6% and compare 48, 60, 72 and 84 months. Payments: $704.55, $579.98, $497.19 and $438.26. Total interest: $3,818.44, $4,799.04, $5,797.44 and $6,813.56. The 84 month loan costs $2,995.12 more interest than the 48 month loan for a payment $266.29 lower. If the $30,000 car loses 15% of its value a year and you put nothing down, the 48 month loan is never above the car's assumed value, the 72 month loan is for 17 months and the 84 month loan for 38 months.

How it works

Payment = amount x r / (1 - (1 + r)^-n) with r = APR / 12. Total interest = payment x months minus amount. Extra interest = a term's interest minus the shortest term's. For the optional check, the loan balance is stepped month by month and compared with a value that falls by the yearly percentage you enter (value = price x (1 - loss)^(months / 12)); each month with a balance above that value counts. A real car's value path will differ.

The FTC says that lower monthly loan payments often require longer terms and higher interest rates which substantially increase overall cost, that many creditors offer 72 or 84 month loans which can lower payments but may have high rates, and that with longer-term financing you could end up owing more than the car is worth.

Sources and basis (opened 2026-10-08): Federal Trade Commission, Consumer Advice, “Financing or Leasing a Car”. Statements used: longer terms lower the payment but make the deal more expensive overall; long loans can leave you owing more than the car is worth.

Not financial advice. This is a planning estimate from the numbers you type. Taxes, fees, insurance and lender or lessor terms vary; confirm every figure against your contract or written quote.

FAQ

Is a 72 month car loan a bad idea?

It is not unlawful or always wrong, but it costs more in total interest than a shorter loan and raises the chance of owing more than the car is worth. The tool puts a dollar figure on both so you can judge.

How much more interest does a longer car loan cost?

It depends on the amount and rate. In the worked example, 84 months instead of 48 costs about three thousand dollars more on a $30,000 loan at 6%. Enter your own figures for yours.

Can I pay off a long loan early to avoid the extra interest?

If your contract allows it without a penalty, extra payments cut the interest. Check the contract, then use the early payoff calculator to see how extra payments change the interest.

What does owing more than the car is worth mean?

It is called negative equity: the loan balance is higher than the car's market value. It matters if the car is totaled, stolen or traded in before the loan is paid down.

Why can I enter a different APR for each term?

Lenders may charge higher rates on longer terms. The FTC notes that long-term loans may have high rates, so use the actual quote for each term if you have one.