Edited by Samuel MountjoyWhat’s the Average Car Loan Length?
Edited by Samuel Mountjoy
Quick Answer
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 Q4 2025. 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 68.94 months for a new car and 67.68 months for a used car—or nearly six years—according to Experian data from the fourth quarter (Q4) of 2025. 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.
Here's more on the data, and what it means for borrowers.
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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 68.94 months in the Q4 of 2025, a slight increase from 67.96 in the same quarter of 2024. 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).
| Credit Score Tier | Average Loan Term (Months) |
|---|---|
| Super prime (781-850) | 64.45 |
| Prime (661-780) | 72.02 |
| Near prime (601-660) | 75.11 |
| Subprime (501-600) | 74.33 |
| Deep subprime (300-500) | 73.12 |
Source: Experian data as of Q4 2025; VantageScore® 4.0 credit scores used
Average Used Car Loan Term
Average used car loan terms followed a similar trend to the average term lengths for new cars. Prime borrowers narrowly edged out near prime borrowers to have the longest average loan term, while deep subprime borrowers had shorter terms on average.
| Credit Score Tier | Average Loan Term (Months) |
|---|---|
| Super prime (781-850) | 66.03 |
| Prime (661-780) | 68.78 |
| Near prime (601-660) | 68.61 |
| Subprime (501-600) | 66.89 |
| Deep subprime (300-500) | 65.26 |
Source: Experian data as of Q4 2025; VantageScore 4.0 credit scores used
Longer-Term Loans Gain Popularity
As has been the case for a few years, loans with terms of 61 months or more account for the majority of both new and used car financing. Not only did the popularity of these loans increase in the past year, but the percentage of loans with the longest terms—73 months or more—increased slightly for both used and new cars.
New Car Financing
Slightly less than 70% of new car loans (69.08%) have terms of 61 months or more (longer than five years), representing a small increase from 66.87% in Q4 2024. However, the percentage of new car loans in the 61- to 72-month range dropped from 39.00% to 37.30%, a decrease of 4.36%. At the same time, the percentage of new car loans with terms of 73 months or more increased by 14.03%, from 27.87% in 2024 to 31.78% in 2025.
Used Car Financing
Almost one-third of all used car loan terms are now over 72 months. Zooming out, more than 70% of used car loan terms are 61 months or more. That figure is up slightly from 69.85% in Q4 2024.
The percentage of used car loans with terms of 73 or more months increased from 27.06% in Q4 2024 to 29.71% for the same period in 2025. The percentage of loans with terms of 85 months or more reached 1.03%, up slightly from 0.95% in 2024.
What Is the Average Term Length for a New Lease?
Terms for new auto leases are holding fairly steady compared to the same time last year. Overall, new auto lease terms increased slightly, from 35.48 months in 2024 to 36.12 months in Q4 2025.
Here's a look at how lease terms changed, segmented by credit score:
- Super prime borrowers: The average lease term increased to 35.55 months in Q4 2025 from 34.83 months a year prior.
- Prime borrowers: Terms rose from 35.96 months on average in Q4 2024 to 36.44 months for the same period in 2025.
- Near prime borrowers: They saw average lease terms increase from 36.53 months in 2024 to 37.09 months in Q4 2025.
- Subprime borrowers: Average lease terms rose from 36.40 months in Q4 2024 to 37.04 months in 2025.
Auto lease calculator
How Longer Auto Loan Terms Can Cost You More
Longer auto loan terms offer lower monthly payments, which are easier on your budget in the short run. The tradeoff: A longer-term loan ultimately costs a lot more in interest, and the higher the loan's interest rate, the more you'll end up paying.
Consider the following comparison of total purchase costs for a new vehicle, based on a 6.37% interest rate (the average for Q4 2025, according to Experian data), $57,500 purchase price and $11,500 down payment. The monthly payment on an 84-month loan is about 40% less than the payment on a 48-month loan. However, you'll pay an additional $4,905 over the 84-month term, making it the pricier option.
| Loan Term (Months) | Monthly Payment | Total Interest Payments | Total Loan Payments | Total Vehicle Cost |
|---|---|---|---|---|
| 48 | $1,088 | $6,230 | $52,230 | $63,730 |
| 60 | $897 | $7,835 | $53,835 | $65,335 |
| 72 | $770 | $9,470 | $55,470 | $66,970 |
| 84 | $680 | $11,135 | $57,135 | $64,635 |
| Loans are for a new vehicle priced at $57,000 with a down payment of $11,500 and a total financed amount of 46,000. Loans carry an APR of 6.37%, with payments made monthly. Calculations do not reflect sales tax, which is typically included in financing. Total vehicle cost denotes down payment plus financed portion of the purchase. | ||||
Source: Experian
To compare various auto loan offers, calculate the vehicle's total cost and the total interest. Here's how: Multiply the monthly payment by the total number of payments to get the total amount the loan will cost. Then subtract the amount you're borrowing from that amount to calculate the total interest cost you'll pay. (You can also use Experian's car payment calculator to determine these amounts.)
Finally, calculate the total cost of the vehicle purchase by adding your down payment amount to the total you'll pay on the loan.
Long-term car loans have other downsides, as well. For example, you could end up "upside down" on the loan, meaning you owe more on the vehicle than it's worth. If you're upside down and your car is totaled, your car insurance won't cover the full amount of your loan.
Learn more: Why You Should Avoid Long-Term Auto Loans
How to Choose the Right Auto Loan Term for You
Your auto loan term plays a big role in the loan's cost. Although longer loan terms reduce your monthly payments, the extra interest you pay generally outweighs the month-to-month savings. If you'd need to stretch your auto loan over more than 72 months to manage payments, you may want to rethink how much car you can afford.
To make a shorter loan term work for you:
- Choose a used vehicle. New vehicles lose significant value in the first year after purchase. Prices of vehicles just one or two years old could be much lower, which could help you swing a shorter loan term.
- Make a bigger down payment. Adding an extra 5% to 10% of the vehicle cost to your down payment means borrowing less, which could make shorter-term loan payments more manageable.
- Shop around for the best deal. Before heading to the showroom, get prequalified by several auto lenders for estimates of the loan amounts and terms you could qualify for. Getting preapproved by those with the best offers can give you more bargaining power at the dealership. While prequalification doesn't affect your credit score, preapproval requires more information and typically involves a hard inquiry on your credit report, which could cause a temporary dip (but may give you a better idea of how much you can afford). Restricting your preapproval applications to a 14-day window helps minimize damage to your credit score.
Learn more: How to Choose the Best Loan Term for Your Needs
The Bottom Line
Along with loan terms, interest rates play a major role in the cost of an auto loan. If your loan prequalification offers have higher interest rates than you'd like, your credit scores could be a factor. Borrowers with good credit are typically eligible for lower interest rates on auto loans. If you can wait six to 12 months to buy a car, taking steps to improve your credit during that time could qualify you for lower interest rates and save you money.
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About the author
Karen Axelton
Karen Axelton is Experian’s in-house senior personal finance writer. She has over 20 years of experience as a journalist and has written or ghostwritten content for a variety of financial services companies.
Read more from Karen