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60-month vs 72-month Auto Loan Comparison (+ the Pros and Cons of Each)

January 14, 2022 by Space Coast Credit Union

If you feel like 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 loan terms have recently been fan-favorites among borrowers because of the appealing monthly payment amounts. In fact, most recently, the average loan term falls in the neighborhood of 69 months for new cars and 67 months for used cars. In this post, you’ll find an auto loan comparison of the pros and cons of a 60- vs. a 72-month car loan to help you make a final decision. And as an added bonus, you’ll find some helpful tips and alternatives along the way (we couldn’t help ourselves). 

60-month auto loan:

A 60-month car loan, or a 5-year loan, offers some ideal pros compared to longer loan terms, but it comes with some cons to consider as well:  


  • 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 for the loan to not be paid 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.


  • 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. 

72-month auto loan

A 72-month loan, or 6-year loan, may be appealing for your “now self,” but maybe not so much for your “future self” for the following reasons: 


  • Lower monthly payments: Many choose to get a 72-month loan because the monthly payments are lower. And, borrowers may be able to get a more expensive used or new car and still stay within their budget. 


  • 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 that lenders worry that the borrower won’t pay them back in full.  
  • Expired warranties & repairs: Most bumper-to-bumper warranties last less than five years, so with a long-term loan, you risk covering repairs out of pocket. And (heaven forbid) 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). 


Our auto loan calculator can help illustrate a 60- vs 72-month auto loan comparison in action. For example, let’s say you’d like to purchase a car that’s $35,000 with $0 down payment. 

For a 60-month loan:

  • The monthly payment comes out to be $632.64 with an interest rate of 3.24 percent.
  • With the added interest payments, you’ll be paying a grand total of $37,958.64 for the life of the loan.

For a 72-month loan:

  • The monthly payment comes out to be $540.28 with an interest rate of 3.54%. 
  • The total payment amount for the life of the loan would be $38,899.88. 

You’d be paying $92.36 less a month with a 72-month loan, but you’d be saving $941.24 overall with a 60-month loan. 


Estimate Your Car Payment

Monthly Payment :
Interest rate / APR :

Monthly Payment : $0.00

Interest rate / APR : 1.89%

"I recently applied and was approved for an auto loan and took only minutes. I highly recommend this bank to everyone."

Joseph Ambler, Broward County

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,” which means owing more than the car is worth over the life of the loan due to depreciation. But, if you are someone who likes 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, and you’d be 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 high interest rates and risk of going upside down, most experts agree that a 72-month loan isn’t an ideal choice. Experts recommend that borrowers take out a shorter loan. And for an optimal interest rate, a loan term fewer than 60 months is a better way to go. You can learn more about car loans here.


Tips on taking a detour from a longer car loan term:

  1. Shop around. Many experts agree that it’s best to do some research before autographing auto loan forms. It also helps to get pre-approved beforehand so that you have a better idea of the loan amount you qualify for and monthly payment amounts. It’s also a good idea to look for a loan with a low APR to help lower interest payments. 
  2. Refinance your long-term loan. If you’ve already pulled the trigger on a long-term loan, know that 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 for your situation.
  3. Make a larger down payment. It’s a good idea 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 pre-payment or pre-payoff penalties. See more car loans tips and tricks here.

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 weighs 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 a 661 to qualify for an auto loan. Keep in mind that lenders will also weigh income heavily into account when reviewing applications. The better your credit scores and income, the better your interest rate will be. If you’re looking for ways to improve your scores, this guide provides some helpful tips on how to do so.

Pssssst, just remember that applying for a car loan can typically involves 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 for a handful of places within a two-week timeframe before it does any damage to your credit. 

What is a good interest rate for an auto loan?

Interest rates will 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 a better idea of what to look for when shopping. 

The average interest rate is 4.05% for new cars and 7.98% for used cars for borrowers with credit scores in the range of 661-780. Here are some helpful tips on applying for a used car loan.

Auto Loan Purchase Interest Rates

Effective Date: January 01, 2022
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Payment Period Purchase APR* "As Low As" Minimum Loan Amount Payment per $1,000
Up to 36 Months 1.89% No minimum loan amount $28.59
Up to 48 Months 3.24% No minimum loan amount $22.24
Up to 60 Months 3.24% $10,000 $18.08
Up to 66 Months 3.39% $10,000 $16.63
Up to 72 Months 3.54% $12,000 $15.44
Up to 75 Months 4.09% $15,000 $15.13
Up to 78 Months 4.39% $20,000 $14.76
Up to 84 Months 4.79% $25,000 $14.04
Rates shown are fixed Annual Percentage Rates for vehicle model years 2022 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?

One of the savviest things you can do before getting your new car is to get a car loan pre-approval because it puts you in a more powerful negotiating position. SCCU auto loan pre-approvals are good for 30 days, and they give 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 loan rates around. 

Best Auto Loans in Florida | Space Coast Credit Union

At SCCU, we make the auto loan purchasing process fast and convenient. You’ll get to 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 and for more helpful resources. We also offer exclusive rates for community heroes. You can apply for a 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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