When you’re shopping for an auto loan, it can be tempting to take out a loan with a longer term. That’s because the monthly payment can be substantially smaller than it would be for a loan with a shorter term. Getting more money in your pocket each month may well seem like a smart financial move.
But should you really opt for an 84-month auto loan? You could pay a higher interest and more interest over the life of the loan. Here, consider the pros and cons of a long-term car loan.
Key Points
• 84-month auto loans typically offer lower monthly payments, making expensive cars more affordable.
• Lower payments can free up funds for other financial goals, such as saving or paying off debt.
• Disadvantages include higher total interest costs and the risk of owing more than the car’s value.
• Alternatives to 84-month loans include buying a cheaper car, choosing a used car, making a bigger down payment, leasing, or paying off early.
• A cosigner can help secure lower interest rates, reducing the financial burden of the loan.
What Is an 84-month Car Loan?
An 84-month car loan is a financing agreement to buy a new or used vehicle with a seven-year loan offer. It’s also one of the long-term car financing options that exceeds the U.S. national average, according to Experian data.
The average car loan term was 68.48 months for new car financing and 67.41 months for used car financing, according to a recent Experian’s State of the Automotive Finance Market report.
Anything above the national average can be considered a long-term car loan, including 84-month and 144-month auto loan contracts.
Is an 84-month car loan bad? That depends on your personal circumstances. An 84-month car loan could be right for you if a seven-year loan term works best for you and your financial situation.
Potential Benefits of an 84-Month Auto Loan
There can be some advantages to choosing an 84-month car loan, depending on your unique financial situation:
Lower Monthly Payments
When shopping for a car loan, choosing a longer repayment length can mean a lower monthly payment. For example, a $30,000 loan with a 6% fixed interest rate would charge $579.98 per month if there was a 60-month term. But payments for the same loan amount with an 84-month auto loan would be $438.26 per month.
Ability to Purchase a More Expensive Car
You might be able to afford a pricier or more luxurious car by choosing an 84-month auto loan. Choosing a longer term can give you a lower monthly payment compared with choosing a shorter term.
More Chances to Refinance
With longer car loan terms, there’s more time to consider auto refinancing down the line. You can refinance for a lower annual percentage rate (APR), although you may pay more interest over the life of the loan if you refinance with an extended term.
You can even consider refinancing your auto loan with bad credit, especially if you find a cosigner whose credit is in good standing.
A More Flexible Monthly Budget
By opting for a smaller monthly payment, you could make more room in your budget for other financial goals. These might include the following:
• Paying down high-interest debt
• Putting away funds for retirement
• Contributing to an emergency fund for unexpected expenses
0% Interest
An 84-month auto loan in some cases may include a 0% interest rate. Consumers with good credit may qualify for 0% APR auto loans.
In general, good auto loan interest rates fall under 7%. The average interest rate on new car loans in mid-2025 stood at 6.73%, according to Experian data.
Interest on car loans can depend on the following factors:
• Does the loan use simple interest or precomputed interest?
• Is the loan interest-free with 0% APR?
• Does the loan have a fixed interest rate or a variable rate?
Simple interest auto loans and precomputed interest auto loans are among the different types of car loans available to consumers. A simple interest car loan charges simple interest on the outstanding balance of your loan each month, whereas precomputed interest auto loans charge interest based on upfront calculations.
A 0% APR car loan does not charge interest whatsoever. Finance companies affiliated with auto manufacturers may offer interest-free car loans as a sales tactic. These lenders, for example, may offer 0% APR on new cars of a specific make and model to entice consumers to make purchases.
Fixed-rate car loans have an interest rate that will never change over the life of the loan. Variable-rate car loans, meanwhile, have an interest rate that can fluctuate over the life of the loan depending on market conditions.
Consumers may wonder what happens to a car loan in case of death. The answer is that car loans do not simply disappear when a borrower dies. A surviving spouse may be responsible for paying the debt, or a lender may move to repossess the vehicle.
Recommended: What Questions to Ask When Refinancing a Car Loan
Potential Drawbacks of Taking on an 84-Month Auto Loan
After reading that list of pros, you might find yourself wondering if an 84-month car loan is ever a bad idea. Here are a few of the potential downsides and risks to securing an 84-month car loan:
Overall Higher Cost
While a lower monthly payment can be a benefit, it doesn’t necessarily mean lower overall costs. Unless you qualify for 0% APR, an 84-month auto loan typically costs more than a 60-month auto loan. That’s because paying interest over a longer term raises your borrowing costs.
Higher Interest Rates
Unless you qualify for 0% APR, 84-month car loans may feature higher interest rates than loans with shorter terms. A higher interest rate can translate into higher borrowing costs over the life of your loan.
The way car loans work is that lenders provide financing to help borrowers purchase a new or used vehicle. Borrowers are expected to repay the car loan over a set term, and these loans may include interest charges. Lenders may offer higher interest rates on long-term car loans and lower rates on loans with shorter terms to encourage clients to repay their debt more quickly.
Risk of Going Upside Down on the Loan
An upside down auto loan means that you owe more than the car is worth. When auto lenders shrink the monthly payment, it extends the amount of time you spend paying overall. The result? Building your equity in the vehicle may take a longer time, and it does say as depreciation typically increases.
A Lot Can Happen in 84 Months
While the average new-car loan length is a bit under 70 months, 84 months is seven years’ worth of your life. A lot can change in seven years — the length of your commute, the number of people using the car, wear-and-tear, repairs, and required maintenance. All of this could occur while you’re still on the hook for a long-term car loan, possibly without a warranty.
Not only that, you might start to notice newer vehicles sharing the roadways and feel the desire to purchase a fresher model or one with more advanced safety features. If you’re locked into an 84-month loan or owe more than your car is worth, you could be required to roll over what you still owe into a new loan just to purchase a new car.
Lack of Flexibility
Long-term car loans may limit your financial flexibility. Lenders may be unwilling to offer their best rates of interest on an 84-month car loan. An 84-month auto loan can keep you in debt for up to seven years and may become a heavy burden if your economic circumstances change for the worse over the life of your loan.
Lenders may impose late fees if you fail to make a timely payment on your loan. But lenders may also honor a car payment grace period before such penalties would apply.
Recommended: Is an Auto Loan Secured or Unsecured?
6 Alternatives to an 84-Month Auto Loan
When you’re looking at auto financing, your choices don’t have to boil down to just a long-term car loan vs. a short-term car loan. There are several other alternative approaches you might consider:
1. Purchase a Less Expensive Car
While a high-maintenance luxury vehicle can be enticing, setting your standards a bit lower could cut down on overall costs. Selecting a less-loaded model in the same line, for instance, might save you a significant amount overall.
2. Choose a Used Car
By picking a used automobile with low mileage, you can still get a reliable vehicle at a more reasonable cost. This can help you avoid taking out an 84-month car loan, and the deal might even come with added perks or warranties.
3. Make a Bigger Down Payment
The more money you can pay upfront when purchasing a car, the less you’ll need to borrow. With a smaller loan, the monthly payments will be less, so you might not have to opt for an 84-month auto loan.
4. Lease a Car Instead
When it comes to the choice between leasing or buying a car, it’s a particularly personal decision. Getting a short-term car lease can mean a lower down payment and lower monthly payments compared with buying a car. That said, leasing also comes with certain fees, restrictions, and penalties for going over on mileage, so it’s not necessarily a best fit for everyone. And of course, when you lease, you don’t own the car.
5. Make Higher Monthly Payments
An 84-month car loan doesn’t necessarily have to take seven years to pay off. You may make higher monthly payments to pay the debt off early. This might be worth considering if your loan doesn’t include prepayment penalties. Making higher monthly payments can minimize your interest charges over the life of your loan.
Prepaying a precomputed interest auto loan, however, may not be as beneficial as prepaying a simple interest auto loan. That’s because any refund you may get from prepaying a precomputed interest car loan is generally lower than what you might have saved if the loan had a simple-interest cost structure.
6. Get a Cosigner
Getting a cosigner who meets the lending requirements may help you qualify for car loans at lower rates of interest. A car loan cosigner is an individual who shares the financial responsibility of repaying the loan alongside the primary borrower, which reduces risk to the lender.
Borrowers and cosigners are expected to provide proof of identity and proof of income when applying for auto loan financing, among other requirements for a car loan.
If you’re drowning in car loan debt, you may wonder if someone can take over your car loan. Transferring an auto loan can be a complex process, but it may be an option for you.
Recommended: No Income Verification Car Loans
The Takeaway
While lower monthly payments may be appealing, taking on an 84-month car loan commitment could mean biting off more than you can financially chew. There are limited instances in which a long-term auto loan is actually worth it. Typically, opting for a standard auto loan can offer more benefits to your financial future, and refinancing can always be an option to consider.
If you’re seeking auto loan refinancing, SoFi is here to support you. On SoFi’s marketplace, you can shop and compare financing options for your car in minutes.
FAQ
Do banks offer 84-month auto loans?
Yes, some banks may offer 84-month auto loans. A bank is a regulated financial institution with a federal or state-based banking charter to accept deposits from customers. Banks typically offer loans in addition to bank accounts.
What is the downside of financing a car for 84 months?
There can be multiple disadvantages to getting an 84-month car loan. One of the downsides is that borrowers may have difficulty getting above water if they’re carrying an outstanding loan balance greater than the value of the car. Another downside is that borrowers can face steep borrowing costs if the loan charges interest over the life of the loan.
What does 0% financing for 84 months mean?
The meaning of 0% financing for 84 months could mean a lender is offering an 84-month auto loan with the APR set at 0% over the life of the loan. While you are not paying interest, make sure you understand any fees being charged, which can raise the overall cost of the loan.
What is the longest-term car loan available?
Some lenders may offer 180-month car loans as their longest financing option. A 180-month car loan features a 15-year loan repayment schedule. You may consider long-term financing terms of up to 180 months when buying an exotic or classic vehicle.
Photo credit: iStock/Drazen Zigic
SoFi's marketplace is owned and operated by SoFi Lending Corp.
Advertising Disclosures: The preliminary options presented on this site are from lenders and providers that pay SoFi compensation for marketing their products and services. This affects whether a product or service is presented on this site. SoFi does not include all products and services in the market. All rates, terms, and conditions vary by provider. See SoFi Lending Corp. licensing information below.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®
SOALR-Q325-089