Average loan terms for new and used cars are close to six years and the majority of loans have terms of more than five years, as of Q2 2024. Longer-term loans can lower your monthly payments, but also cost you more in interest over time, increasing the total price of your vehicle.
The average car loan term is 68.48 months for a new car and 67.41 months for a used car, or close to six years, according to Experian data. The average length of auto loans for new and used vehicles has remained fairly steady since last year, reflecting the continuing popularity of longer-term auto loans. While longer auto loans offer more affordable monthly payments, they can ultimately cost you more in total interest than loans of 60 months or less.
Average New Car Loan Term
The latest Experian State of the Auto Finance Market report found the average term for new car loans—the number of months it takes to pay off loans on new cars—rose to 68.48 months in the second quarter (Q2) of 2024, a slight increase from 68.29 in Q2 2023. Auto loans are typically offered with terms of 48, 60, 72 or 84 months.
When new car borrowers are segmented by credit score, however, average loan terms for all but the most creditworthy borrowers exceeded 72 months (or six years). Super prime and deep subprime borrowers saw the biggest change, with average loan terms increasing by about three weeks.
| Credit Score Tier | Average Loan Term (Months) Q2 2023 | Average Loan Term (Months) Q2 2024 | Change |
|---|---|---|---|
| Super prime (781-850) |
63.37 | 64.04 | +1.04% |
| Prime (661-780) |
71.30 | 71.41 | +0.15% |
| Near prime (601-660) |
74.12 | 74.13 | +0.01% |
| Subprime (501-600) |
73.27 | 73.39 | +0.16% |
| Deep subprime (300-500) |
71.58 | 72.24 | +0.91 |
MORE:
https://www.experian.com/blogs/ask-experian/what-is-the-average-length-of-a-car-loan/