72-Month Car Loans: Why the Lengthy Term Can Hurt Your Wallet

At first glance, a 72-month car loan sounds like a win—tiny monthly payments and you get to drive that shiny new ride. What’s not to love? But here’s the kicker: stretching out a loan for six years isn’t actually a deal. The more you look at the numbers, the more the cracks show. That comfortable payment can mask some pretty sneaky costs.

The longer your loan lasts, the more you shell out in interest. Lenders love long-term loans, not because they want to help you, but because they’ll make thousands more in the end. And if you’re the kind of person who trades cars every few years, hang on—owing more than your car is worth is a nasty trap to fall into. Let’s untangle why a 72-month car loan almost always works out better for the lender than you.

• What Is a 72-Month Car Loan Anyway?
• The Real Cost: Paying More in Interest
• Depreciation and Being Upside Down
• The Illusion of Affordable Payments
• How Long-Term Loans Affect Your Future Options
• Smarter Alternatives and Pro Tips

What Is a 72-Month Car Loan Anyway?

A 72-month car loan is exactly what it sounds like: you borrow money to buy a car and then pay it back over 72 months, which is six years. That’s way longer than the old-school 36-month or 48-month options, but dealerships and lenders have been pushing these longer 72-month loan terms a lot more since 2020. They know people want lower monthly payments, and stretching things out helps with that—at first glance, anyway.

Here’s a quick breakdown of what you’re signing up for with this kind of loan:

• Loan term: 72 months (six years!)
• You can get these loans for both new and used cars.
• Monthly payments are usually lower compared to shorter-term loans.
• You end up making payments for as long as most kids are in elementary school.

Dealers love advertising the lower monthly payment, but they don’t always mention you’ll pay more in interest over time. If you’re curious about how common these long loans are, check this out: In 2024, about 40% of new car buyers chose loans that were 72 months or longer—so it’s not rare at all.

That table lays it out: the longer you stretch your loan, the more you fork over in interest. Sure, the lower monthly payment looks friendly, but there’s a trade-off hiding under the hood.

The Real Cost: Paying More in Interest

This is where the math gets ugly. Sure, a 72-month car loan keeps your monthly payment low, but the tradeoff is a pile-up of interest over the years. Most people don't realize that banks and lenders aren’t just stretching out your payments—they’re stacking up their profits, too.

You can spot this by checking the numbers. Let’s say you finance $30,000 with a 5% interest rate. With a regular 48-month loan, you’d pay $690 a month and about $1,580 in interest for the whole term. But stretch that to 72 months, and your payment drops to $483—but you end up handing over about $4,776 just in interest. That’s three times more money down the drain, just for having a lower bill each month.

Lenders know longer loans are riskier, so they sometimes bump up the interest rate, too. Even a small increase—like from 5% to 6%—can cost you hundreds more over those extra years. Plus, the longer your loan term, the longer you’re stuck with required full-coverage insurance, which adds to your real cost.

• Double-check your final total paid—not just the monthly installment.
• Always compare the total interest paid over loan lengths before locking anything in.
• If you pay extra each month, you can cut down the interest, even on a long loan. But most people don’t bother, so the 72-month loan still ends up being a losing deal.

If it feels like a steal, run the numbers again. Odds are, all those extra months just put more of your money into the lender’s pocket—never back into yours.

Depreciation and Being Upside Down

Here’s a hard truth about cars: most lose value as soon as you drive them off the lot. This drop in value is what people mean when they talk about depreciation. According to data from Edmunds, new cars can lose up to 20% of their value in the first year, and about 60% after five years.

So what happens if you’re paying off a 72-month loan while your car sinks in value year after year? You might end up “upside down” or “underwater,” which means you owe more than the car is actually worth. Here’s how that looks in real numbers:

This table shows a typical sedan bought for $25,000 with a 72-month loan. For years, that loan balance stays higher than the car’s value. You’d be in the red if you needed to sell or trade in your car before the term ends.

Why does this matter? If your car is totaled in an accident or stolen, insurance usually pays what the car is worth—not what you still owe. That could leave you on the hook for thousands, just to pay off the rest of the loan for a car you no longer have. The longer your loan, the bigger this risk gets.

• If you want to upgrade your car before paying off the loan, you’ll probably have to roll the leftover debt onto your next loan. That means paying interest on top of interest.
• Many people get stuck in a loop, always owing more than their car is worth, just trying to keep those low payments going.

The bottom line: Long-term loans and fast-dropping car values are a messy combo. The longer you drag out payments, the longer you risk being upside down on your ride.

The Illusion of Affordable Payments

The big pitch with a 72-month loan is always the lower monthly payment. On paper, saving $100 or even $200 a month feels like a no-brainer, especially when you’re already stretching to afford that car. But here’s the reality: just because your bill is small each month doesn’t mean you’re actually saving money overall.

Take a look at what happens with a typical auto loan. Let’s compare two people buying the same $30,000 car, both putting $3,000 down. One goes for a 48-month loan, and the other picks the 72-month option. Both get an interest rate around 6.5%, which is a pretty normal rate for used cars in 2025.

Here’s the eye-opener: you’d pay an extra $3,500 in interest for picking the longer term, just for the privilege of a lower monthly payment. That’s cash you could’ve put in savings, used for repairs, or even spent on something fun. The payments feel easier now, but they cost you way more in the long run.

Another problem? Lower payments give people a false sense of buying power. Dealers know it. You walk in wanting a $25,000 car, but the monthly number on a 72-month loan makes that $35,000 SUV look “affordable” when it’s really just a longer trap. Suddenly, you’re driving off with a bigger loan than you planned, all because the payment didn’t scare you off.

If you’re thinking about going this route, ask yourself: do you want a smaller payment now, or to pay less for your car overall? It usually doesn’t work out both ways. When you keep your loan term shorter—even if the payment stings a bit—odds are, you’ll spend a lot less getting from A to B.

How Long-Term Loans Affect Your Future Options

Committing to a 72-month car loan doesn’t just impact your monthly budget—it can tie your hands for years. When you lock yourself into a long-term deal, you’re making decisions now that’ll mess with your freedom down the line.

First, most cars lose value fast. According to data from Edmunds, a new car can drop around 20% to 30% just in the first year. After five years, it’s usually lost more than 60% of its value. If you borrow for six years, you could be stuck owing more than your car’s worth for most of that time.

If you want to sell or trade in before the loan is paid, your options are limited. You might need to pay the difference out of pocket or roll negative equity into another loan, which just snowballs the debt. That’s how some folks end up with a $30,000 loan on a $22,000 car.

Having a long auto loan can also tie up your finances if life changes. Say you need a different car for a new job, want to move, or something just goes wrong—having a car you’re still paying off for years is a hassle. Lenders will see the debt, too, making it harder to qualify for another car, a mortgage, or even a good credit card.

Plus, you’ll pay more for things like extended warranties, since they usually run out before your 72-month loan is done. If expensive repairs come up, you’re on your own. You’re stuck with both the payments and the repair bills by year five or six, which is rough if you’re not ready.

Because you’re stretched thin over such a long time, your room to negotiate or jump on deals in the future shrinks. You lose flexibility. If you ever have to choose between keeping up on that old car payment or saving for something better, you’ll wish you hadn’t locked yourself in so long.

Smarter Alternatives and Pro Tips

Just because a dealer waves a 72-month car loan in front of you doesn’t mean you have to take the bait. There are way smarter ways to finance your car and keep more money in your pocket—and less in the lender’s.

If you want to really save on car loans, try to keep your term under 60 months. Here’s why: shorter loans not only usually have lower interest rates, but you’re also less likely to end up “upside down” on your loan. According to Experian, the average new car loan in the U.S. in 2024 was about 67 months, but people who stuck with 48 or 60 months saved thousands on interest.

When shopping for financing, always compare offers from credit unions and banks. Did you know credit unions often offer rates at least 1% lower than dealerships or big banks? Over five years, that can chop hundreds—sometimes thousands—off the total interest you pay.

Here are some quick tips to dodge the worst pitfalls:

• Aim for a loan term as short as you can realistically afford—48 or 60 months beats 72 every time.
• If you have cash for a down payment, use it. A 20% down payment reduces what you owe, which means less money going to interest and fees.
• Don’t just look at the monthly payment. Pay close attention to the interest costs over the full life of the loan.
• Even if you can get approved for a longer term, it’s smart to buy a car that won’t strain your budget on a shorter loan.

Check out this quick breakdown:

If you already have a long-term loan, you might want to refinance with a shorter one, especially if your credit has improved since you bought your car. Always double-check the math—sometimes it just makes sense to pay extra toward principal each month if refinancing isn’t an option.

The bottom line: The best car loan is one you can pay off quickly, with minimal interest, and with monthly payments that don’t wreck your monthly budget. Don’t let those long-terms fool you—there are better choices out there, and a little homework goes a long way.