When shopping for a new or used car, one of the key decisions you’ll face is financing. Among the many questions buyers often ask: Do dealerships offer 72-month financing? The answer is a resounding yes—in fact, longer-term car loans have become increasingly popular in recent years. In this comprehensive guide, we’ll dive deep into the world of 72-month auto financing, covering everything from how it works to whether it’s the right choice for you.
Understanding 72-Month Auto Financing
A 72-month car loan, often referred to as a six-year loan, is a long-term financing option offered by dealerships and auto lenders. Historically, car loans were typically offered for 36 or 48 months, but as vehicle prices have risen, so too has the average loan term.
Why 72-Month Loans Are Popular
The primary draw of a 72-month car loan is lower monthly payments. By extending the repayment period, dealerships make vehicles more accessible to a wider audience. Here are a few key reasons why these long-term loans have gained popularity:
- Affordability – Lower monthly payments help buyers stay within budget.
- Higher loan amounts – Buyers can afford more expensive vehicles with extended repayment.
- Market competitiveness – Dealerships often offer long-term financing to attract more customers.
Who Offers 72-Month Financing?
Most major dealerships, including those representing Ford, Toyota, Chevrolet, Honda, and Chrysler, offer 72-month financing options. Additionally, many manufacturer-backed financing arms like Toyota Financial Services, GM Financial, and Ford Credit also provide these extended loans.
Pros and Cons of 72-Month Auto Loans
Before committing to a 72-month loan, it’s crucial to understand the benefits and drawbacks associated with this long-term financing option.
Pros
- Lower Monthly Payments – This allows buyers to afford a better vehicle or keep their monthly budget in check.
- Increased Buying Power – A longer loan term can result in loan approval for higher-priced vehicles.
- Flexible Financing Options – Many lenders and dealerships offer promotional APRs for qualified buyers.
Cons
- Higher Interest Rates – Longer terms often come with higher APRs, which can significantly increase the total cost of the vehicle over time.
- Risk of Being Upside Down – It’s common for borrowers to owe more than the car is worth for a longer period, especially with depreciation.
- Longer Financial Commitment – A six-year loan ties consumers to a vehicle for a longer time, which may not align with their lifestyle or financial goals.
- Increased Total Cost – More months of interest can add thousands of dollars to the vehicle’s total cost.
How Auto Dealerships Present 72-Month Financing
Dealerships often market 72-month financing as a flexible way for buyers to afford the car they want. When you visit a dealership, a financing specialist will typically lay out your loan options—these often include 36, 48, 60, and 72-month terms.
The Role of Promotional Financing Offers
Some dealers offer 0% APR deals or low interest rates to buyers with excellent credit. However, these promotions are usually limited to 60 or 66 months. The 72-month options may come with slightly higher interest rates, though they’ll still feel more manageable due to the longer term.
Loan Approval and Credit Requirements
While 72-month loans are available to a wide range of buyers, your chances of securing favorable terms greatly depend on your credit score:
| Credit Score Range | Possible Interest Rate (approximate) |
|---|---|
| 750+ | 1.5% – 3.5% |
| 650 – 749 | 4% – 7% |
| 600 – 649 | 8% – 12% |
| Below 600 | 12% – 20% (or higher) |
Buyers with subprime credit may still qualify, but they’ll pay significantly more in interest over time.
Bundling Additional Coverage
Another common tactic used by dealerships is to offer extended warranties, maintenance plans, or insurance coverages over the loan term. This is especially common with 72-month loans, as buyers are financially committed for a longer period, and dealers may want to cover any anticipated costs during the extended term.
Is a 72-Month Financing Plan Right For You?
Deciding whether to take a 72-month auto loan depends heavily on your financial situation and long-term needs.
When It Makes Sense
A 72-month loan may be a good idea if:
- You’re looking to keep your monthly payments as low as possible
- You plan to keep the vehicle for a long time
- You have a stable financial situation that supports a longer-term commitment
- Interest rates are low, especially through manufacturer incentive programs
When to Avoid 72-Month Financing
You may want to steer clear of a 72-month loan if:
- You plan to trade in or sell your car within 3-4 years
- Your credit score is low, which can result in very high APRs
- You are unable to afford the long-term commitment
- You value building equity in your vehicle
The Depreciation Dilemma
One of the most overlooked factors in long-term auto financing is depreciation. A typical car can lose 20% or more of its value in the first year alone. Over six years, you’re likely to be upside down on the loan for a significant portion of time. For example, if you drive a car that’s commonly totaled or stolen, you could end up owing more than what your insurance company would pay.
A Comparison: 72-Month vs. Shorter Term Loans
To better understand the implications of a 72-month loan, let’s compare it to 36-, 48-, and 60-month terms.
Impact on Monthly Payments
Let’s use a $30,000 vehicle as an example. Here’s how the monthly payments might vary with different loan terms, assuming a 5% APR.
| Loan Term | Monthly Payment (approximate) | Total Interest Paid | Total Cost of Vehicle |
|---|---|---|---|
| 36 months | $877 | $1,571 | $31,571 |
| 48 months | $683 | $2,787 | $32,787 |
| 60 months | $570 | $4,221 | $34,221 |
| 72 months | $498 | $5,899 | $35,899 |
As the table shows, while a 72-month loan lowers your monthly payment, the total cost of the car increases significantly due to added interest.
Risk of Negative Equity
Negative equity, or being “upside down,” occurs when the amount you owe on your car loan exceeds the vehicle’s value. It’s a real concern with extended-term loans. New vehicles can lose up to 40% of their value within three years. A 72-month loan could leave you in a negative equity position for more than 4 years.
The Trade-In Effect
If you decide to trade in your vehicle before the loan term ends, you’ll have to roll over any negative equity into your new loan, which could set you back financially.
The Industry Trends Behind 72-Month Financing
Why are dealerships offering 72-month loans more frequently now than in the past? The answer lies in broader market trends.
Increasing Vehicle Prices
The average price of a new car in the U.S. has steadily increased over the past decade, largely due to inflation, supply chain issues, and increased demand for SUVs and higher-end models. According to a report from Kelley Blue Book, the average new car price was just over $48,000 in 2023, up from $32,000 in 2015.
As prices rise, longer loan terms help people manage larger purchase amounts within their budgets. This makes 72-month financing an attractive option for many consumers.
Consumer Behavior and Debt Preferences
Modern consumers are more comfortable carrying debt for longer periods, particularly if the asset being financed depreciates over time or offers significant utility, like a car.
This shift in consumer behavior, paired with aggressive dealer finance offers, has normalized longer loan structures—especially among first-time buyers and younger consumers.
Manufacturer Incentives and Lending Practices
To compete in a crowded market, manufacturers and dealerships have increased their use of financing incentives to attract customers. While short-term promotions (like 0% APR for 36-60 months) still exist, 72-month rates are being used more strategically—especially for used cars, luxury models, and high-end trims.
Key Considerations Before Choosing 72-Month Financing
Before you finalize a 72-month loan, ask yourself several key questions.
What Are Your Long-Term Plans?
How long do you plan to keep the vehicle? If you like to upgrade every 3-4 years, a 72-month loan might not be ideal. In contrast, if you intend to keep the car for a long time or want to drive a more expensive model without breaking your monthly budget, it can be a solid option.
Is the Interest Rate Competitive?
Be sure to shop around for the best interest rate. Even a slight increase in APR can add thousands to the total price of the car over a 72-month term. Consider securing preapproval from local credit unions or banks before visiting a dealership—it may give you leverage.
Are There Penalties for Paying Early?
Some auto loan contracts include prepayment penalties, particularly with special financing offers. Be sure to read the fine print and understand whether you can pay off the loan early without incurring additional fees.
Is the Loan Term Adjustable?
Not all dealerships provide flexible options once financing is approved. Before signing, ask if you’ll have the opportunity to refinance the loan later or make additional payments to reduce the balance without penalty.
Alternatives to 72-Month Auto Financing
If a seven-year auto loan doesn’t sound right for your situation, there are other paths you can take.
Shorter Loan Terms (60 or 48 Months)
Shorter-term loans often come with better APRs and allow you to build equity faster. While your monthly payments will be higher, you can benefit from significant savings in interest and avoid prolonged debt.
Used Car Financing
Consider buying a certified pre-owned (CPO) vehicle, which may offer the same technology and features as a new car—at a fraction of the cost. A 60-month loan on a used car can be a more financially prudent path.
Leasing Options
For those who prefer a vehicle every few years, leasing can be a solid alternative. Lease terms usually range from 24 to 36 months and often include manufacturer incentives or flexible mileage plans.
Buyer Beware: Are You Being Taken Advantage Of?
Some dealerships may steer buyers toward 72-month loans to increase their sales commissions or finance income. Always do your homework and ask the right questions. Understand the full cost of financing and whether a longer term is truly necessary for your budget.
Conclusion: Making the Smart Choice with 72-Month Financing
So, do dealerships offer 72-month financing? Yes, and it’s a widely available option today. However, its appropriateness depends entirely on your financial situation and long-term goals.
72-month financing can be a smart choice if you:
- Can secure a favorable interest rate
- Plan to keep your car past the loan term
- Need to keep your monthly payments low
- Are financially prepared to stay committed for six years
On the other hand, a 72-month loan may not be right for everyone. If you’re uncomfortable with a long-term obligation or prefer the idea of owning your car sooner, a shorter-term loan might better suit your needs.
Final Tip
When negotiating your car loan, always request multiple offers for different terms. This will help you compare real costs and find the best fit for your personal finance strategy.
Now that you’ve read this detailed guide, you’re well-equipped to make an informed decision on whether 72-month financing is your best option—or if another path will better suit your goals.
Remember: Understanding your financing options can make all the difference in your car-buying journey.
What is 72-month financing and how does it work?
72-month financing refers to a car loan that is structured to be paid back over a period of six years, or 72 months. This type of financing allows buyers to spread the cost of their vehicle purchase into smaller, more manageable monthly payments. The extended term reduces the amount due each month, which can be particularly helpful for buyers who are on a tight budget or who are purchasing a more expensive vehicle. However, because the repayment period is longer, lenders may apply higher interest rates compared to shorter-term loans.
In practice, 72-month financing is often offered by dealerships in partnership with auto finance companies. These loans can be secured or unsecured, though most vehicle loans are secured with the car itself serving as collateral. If a borrower defaults on the loan, the lender has the right to repossess the vehicle. While this option makes monthly payments more affordable, it also means that buyers may end up paying significantly more in total interest over the life of the loan compared to a traditional 48- or 60-month auto loan.
Do most car dealerships offer 72-month financing options?
Yes, a majority of car dealerships do offer 72-month financing as part of their financing packages. This is especially true for larger franchised dealerships that have established relationships with major auto finance companies such as GM Financial, Ford Credit, or Toyota Financial Services. These dealerships typically have in-house finance departments that can shop around and offer multiple lending options, including long-term loans. Buyers interested in 72-month terms can usually find financing partners willing to work with their specific credit profile.
Independent or smaller dealerships may also offer 72-month financing, but the availability can vary depending on the lenders they work with and the buyer’s creditworthiness. These dealers may have fewer financing partners, so buyers with lower credit scores may find fewer options available to them. However, due to the increasing popularity of longer-term loans, many dealerships are working with more flexible lenders to meet consumer demand.
What are the advantages of a 72-month car loan?
One of the main advantages of a 72-month car loan is lower monthly payments. This can make it easier for buyers to afford a vehicle they might otherwise not qualify for with a shorter-term loan. Lower monthly payments can also help buyers manage their budgets, especially when juggling other financial obligations. Additionally, for individuals who plan to keep their vehicles for six years or longer, a 72-month loan can match their ownership timeline, making it a logical financial structure.
Another benefit is the potential to finance a more expensive vehicle without a large increase in monthly payments. This can appeal to those who desire a higher trim level, added features, or better safety technology. For some buyers, the predictability of a fixed loan term and rate for six years can also provide financial stability compared to shorter-term financing that might require refinancing down the line.
Are there risks associated with a 72-month auto loan?
Yes, there are several risks that accompany 72-month auto loans. One of the main drawbacks is that longer-term loans often come with higher interest rates, which means you’ll end up paying more over the life of the loan. Additionally, because the car depreciates over time, there’s a greater chance of being “upside down” on the loan, meaning you owe more than the car is worth. This can complicate trade-in or selling decisions in the future.
Another major risk is the potential for continued vehicle payments during the later stages of the loan, when maintenance and repair costs typically increase. By the time the car reaches years four, five, and six, systems may begin to wear, leading to higher repair bills. If the car breaks down and the warranty has expired, the buyer could be stuck with both repair costs and remaining loan payments. This financial dual burden can be stressful for those who did not fully plan for long-term vehicle ownership.
Can I get 72-month financing with bad credit?
Many lenders offer 72-month financing to individuals with less-than-perfect credit, and it’s common for subprime lenders to provide these loan terms as an option. These lenders specialize in working with consumers who have faced credit challenges, such as late payments, bankruptcy, or low credit scores. However, while approval may be possible, the interest rates are likely to be higher, and the total cost of the loan will reflect the increased risk the lender takes.
Dealerships that finance through “buy here, pay here” models may also offer extended financing terms, especially in cases where buyers may not qualify for standard financing. These arrangements tend to be more flexible but are typically structured with higher monthly payments, higher interest, or greater restrictions. It’s important for buyers with bad credit to shop wisely and understand the entire cost and commitment that comes with 72-month financing.
How does a 72-month loan affect the vehicle’s warranty and maintenance?
Since most new vehicle warranties last three years or 36,000 miles, a 72-month loan period can extend well beyond the standard warranty coverage. That means, for the final three years of your loan, you may be responsible for all maintenance and repair expenses without warranty protection. These costs can accumulate quickly, especially for wear-and-tear items such as brakes, suspension components, or transmission issues that might arise as the vehicle ages.
To help manage this risk, some buyers opt to purchase an extended warranty or service contract that covers major mechanical repairs throughout the loan term. While this can provide financial assurance, it often adds to the upfront or monthly cost of the vehicle purchase. Prospective buyers should carefully evaluate whether the added expense of an extended warranty is worth the potential savings in repair costs.
Should I consider a 72-month loan for buying a car?
Whether a 72-month loan is right for you depends on your individual financial situation and long-term plans. If you need lower monthly payments and are confident about keeping and maintaining the car for the full six-year term, it might be a suitable option. It can also be a viable solution for those who are trying to avoid a larger monthly payment or who have high credit scores that allow them to qualify for favorable interest rates even on extended terms.
On the other hand, if you’re likely to trade in your vehicle before six years is up or are concerned about depreciation, higher interest, or rising maintenance costs, then a shorter loan term might be better suited to your needs. Before committing, you should also consider how the total cost of the 72-month financing compares with what you would pay for a 60-month or 48-month loan. Careful financial planning and comparison shopping can help ensure that your decision supports both your budget and your long-term financial goals.