60 vs. 72 Month Car Loan: Which Is Better?

You're financing a car and have narrowed it down to two options:

60 months

or

72 months.

Which one should you choose?

The simple answer is:

A 60-month loan generally gives you a higher monthly payment but lets you pay the vehicle off faster and usually results in less total interest. A 72-month loan generally lowers the monthly payment but keeps you in debt longer and usually costs more in total interest.

That doesn't mean a 72-month loan is automatically bad.

And it doesn't mean everyone should choose 60 months.

The better option depends on the interest rate, amount financed, your monthly budget, how long you plan to keep the vehicle, and what the extra payment would mean for the rest of your finances.

Let's look at the actual numbers.

What's the Difference Between a 60- and 72-Month Car Loan?

It's simply the amount of time you have to repay the loan.

60 Months

5 years

72 Months

6 years

With a 72-month loan, you're spreading the amount borrowed across 12 additional payments.

That's why the monthly payment goes down.

But you're also borrowing the money for another year.

That means you're generally paying interest for longer.

How Much Lower Is the Payment at 72 Months?

Let's use a simple example.

Suppose you finance:

$30,000

at:

7% APR

Your estimated payments would be approximately:

Figures are rounded estimates for illustration.

The 72-month loan saves approximately:

$83 per month.

That's meaningful.

But you'd also pay approximately:

$1,184 more in total interest

and make payments for an additional year.

Neither option is automatically right or wrong.

You're making a trade:

Lower payment today

vs.

Faster payoff and lower borrowing cost.

What About a $20,000 Loan?

At approximately 7% APR:

Going to 72 months saves roughly:

$55 per month.

What About a $40,000 Loan?

At approximately 7% APR:

Now the difference is approximately:

$110 per month.

As the amount financed increases, the payment difference between terms becomes more noticeable.

Why Would Someone Choose 72 Months?

Usually:

Cash flow.

Let's say the vehicle you want produces these two options:

60 months: $594/month

72 months: $511/month

Maybe $594 makes your budget uncomfortable.

But $511 leaves enough room for:

• Insurance
• Fuel
• Savings
• Childcare
• Housing
• Other debt
• Emergency expenses

That matters.

Personal finances don't exist on a spreadsheet.

Having the shortest possible loan isn't particularly helpful if the payment leaves you with no breathing room every month.

A 72-month loan can make sense when the lower payment gives you useful financial flexibility and you understand the tradeoff.

Why Would Someone Choose 60 Months?

If you can comfortably handle the higher payment, there are some obvious advantages.

You Pay the Car Off Faster

Five years instead of six.

Pretty straightforward.

You Generally Pay Less Interest

You're borrowing the money for less time.

You Build Equity Faster

This can become important if you want to trade the vehicle before the loan is completely paid off.

You Spend Less Time With a Car Payment

There's something nice about reaching:

$0/month

a year sooner.

What Does “Building Equity Faster” Mean?

This is an important consideration that doesn't get talked about enough.

Vehicles generally depreciate over time.

At the same time, you're paying down your loan.

Your equity is roughly the difference between:

What your vehicle is worth

and

What you still owe.

Suppose your vehicle is worth:

$25,000

and your payoff is:

$20,000.

You have approximately:

$5,000 positive equity.

But if your vehicle is worth $25,000 and your payoff is:

$29,000

you're approximately:

$4,000 upside down.

Because a shorter loan generally pays down principal faster, it can help you reach a stronger equity position sooner.

That's especially useful if you're someone who trades vehicles every few years.

Is a 72-Month Car Loan Bad?

No.

A 72-month loan isn't automatically a bad financial decision.

The problem comes when shoppers use the longer term purely to justify buying significantly more vehicle than they can reasonably afford.

For example:

You originally wanted to stay around:

$500/month.

The vehicle you like is:

$650/month at 60 months.

Instead of reconsidering the vehicle price, you stretch the loan until the payment gets close enough to $500.

Now the payment looks better.

But you haven't made the vehicle cheaper.

You've just changed how long you're paying for it.

That's an important distinction.

A Lower Payment Doesn't Mean a Cheaper Car

This is probably the biggest takeaway from this entire article.

Suppose you're choosing between:

Vehicle A

$550/month 60 months

and:

Vehicle B

$525/month 72 months

Which one costs less?

You can't answer from the payment alone.

Vehicle B has the lower monthly payment, but you're making 12 additional payments.

That's why shopping purely by monthly payment can be misleading.

Always know:

• Vehicle price
• Amount financed
• APR
• Loan term
• Monthly payment
• Total interest

The payment is important.

It just isn't the whole deal.

What If the APR Is Different?

Now things get even more interesting.

You won't necessarily receive the exact same interest rate at every loan term.

For example, you might be offered:

5.9% for 60 months

but:

6.9% for 72 months.

Now you're not only borrowing the money longer.

You're also paying a higher interest rate.

That increases the cost difference between the two loans.

This is especially important with manufacturer promotional financing.

A manufacturer may offer a special APR at one term but not another.

Don't assume:

“If I qualify for 4.9%, I can get 4.9% at any term I want.”

Financing programs can have specific eligibility and term requirements.

Compare the actual offers available to you.

Should You Take 72 Months and Just Pay It Off Early?

You'll sometimes hear this strategy:

“Take the 72-month loan for the lower required payment and just pay extra every month.”

There can be some logic to that.

If your loan allows early principal payments without a prepayment penalty, you could potentially choose the longer term for flexibility while voluntarily paying more when your budget allows.

For example:

Required payment:

$511

But you voluntarily pay:

$600

when possible.

That could help you pay the loan down faster.

However, you need to check the actual loan agreement and understand how additional payments are applied.

And there's a behavioral question:

Will you actually pay extra?

It's easy to say:

“I'll just pay $100 extra every month.”

Six months later, that extra $100 has a way of finding somewhere else to go.

A 60-month loan forces the faster repayment schedule.

A 72-month loan gives you flexibility.

Which one works better depends partly on how you manage money.

What If You're Putting Money Down?

A down payment can make the difference between the two terms much smaller.

Suppose you're financing $30,000 at approximately 7%.

We saw:

60 months: about $594

72 months: about $511

Now suppose you put another $3,000 down, reducing the amount financed to approximately $27,000.

Your estimated payments become roughly:

60 months: $535

72 months: $460

That might make the 60-month option much more comfortable.

Instead of extending the loan, sometimes reducing the amount financed solves the payment problem.

Your Trade Equity Can Do the Same Thing

Suppose your trade is worth:

$20,000

and you owe:

$14,000.

That's approximately:

$6,000 positive equity.

If that equity is applied to your next purchase, you're financing substantially less.

That can make a shorter term easier to afford.

But the opposite is also true.

If you're carrying negative equity into the next transaction, you may be financing substantially more than the price of the vehicle you're buying.

That's when longer loan terms can become especially tempting.

And it's also when you should pay particularly close attention to the total transaction.

What If You Have Negative Equity?

Let's say:

Your trade is worth:

$20,000

but you owe:

$26,000.

You're approximately:

$6,000 upside down.

Depending on financing approval and the structure of the transaction, some or all of that negative equity may end up included in the new loan.

Now imagine you're buying a $30,000 vehicle.

You're no longer dealing with a straightforward $30,000 purchase.

Your amount financed could be substantially higher after negative equity, taxes, fees, and other transaction details.

Stretching that larger amount across 72 months may make the payment look more manageable.

But it can also leave you in a difficult equity position for longer.

If you're already significantly upside down, I'd be cautious about solving the problem purely by extending the next loan.

How Long Are You Planning to Keep the Vehicle?

This matters a lot.

If you're someone who buys a vehicle and keeps it for:

8–10 years

a 72-month loan may be less concerning because you intend to keep the vehicle well beyond the loan term.

You'll eventually have several years without a car payment.

But if you typically trade every:

2–3 years

a long loan can become more problematic.

You may still owe a substantial amount when you're ready for the next vehicle.

That increases your chances of dealing with negative equity.

If you know you like changing cars frequently, paying the loan down faster deserves serious consideration.

New vs. Used Can Matter Too

A 72-month loan on a brand-new vehicle isn't necessarily the same situation as a 72-month loan on an older used vehicle.

Imagine financing a seven-year-old vehicle for another six years.

By the time the loan is finished, the vehicle could be:

13 years old.

That doesn't automatically make the loan wrong.

But you should think about:

• Expected reliability
• Mileage
• Maintenance
• Repairs
• How long you plan to keep it
• Whether the loan will outlast your desire to own it

The length of the loan should make sense relative to the vehicle you're financing.

Don't Forget About Insurance and Ownership Costs

Suppose you can afford:

$600 per month

for transportation.

That doesn't necessarily mean you can afford a:

$600 car payment.

You still have:

• Insurance
• Fuel
• Maintenance
• Registration
• Repairs
• Tires

If the 60-month payment consumes your entire transportation budget, the 72-month option might provide necessary breathing room.

Or it might mean the vehicle itself is too expensive.

That's the question you should ask.

When I'd Lean Toward 60 Months

I would generally lean toward the shorter term when:

• The payment comfortably fits your budget
• The APR is lower
• You want to minimize total interest
• You trade vehicles relatively frequently
• You want to build equity faster
• You want to eliminate the car payment sooner
• You have enough cash flow that the higher payment isn't stressful

If the difference between 60 and 72 months is only $60 and that $60 doesn't matter much to your budget, I'd seriously consider 60.

When 72 Months Might Make Sense

I wouldn't automatically rule out 72 months when:

• The payment difference materially improves your monthly budget
• The APR remains competitive
• You plan to keep the vehicle for a long time
• You're buying a vehicle comfortably within your means
• You want more monthly cash-flow flexibility
• You're disciplined about making additional principal payments when possible

The key phrase there is:

comfortably within your means.

A longer loan should ideally provide flexibility—not be the only thing making an otherwise unaffordable vehicle appear affordable.

What About 84 Months?

Yes, 84-month auto loans exist.

That's:

7 years.

The same principle applies.

Your monthly payment goes down because you're spreading the loan across even more payments.

But you're also potentially:

• Paying more total interest
• Staying in debt longer
• Building equity more slowly
• Increasing the chance you'll want another vehicle before the loan is paid off

There are situations where an 84-month term may be available and make sense to a buyer.

But I would pay very close attention to why you need that term.

If the answer is:

“It's the only way I can afford the vehicle.”

I'd seriously consider whether a less expensive vehicle would put you in a healthier position.

So, Is 60 or 72 Months Better?

If you can comfortably afford both options and the rates are similar, 60 months will generally be the stronger financial choice because you'll pay the loan off sooner and typically pay less total interest.

But personal finance isn't only about minimizing interest.

If the 72-month option gives you meaningful breathing room in your monthly budget, the rate is reasonable, and you're planning to keep the vehicle for a long time, it may make sense.

Here's the simplest way I'd think about it:

Choose 60 Months If:

You can comfortably handle the payment and want to minimize the time and money spent financing the vehicle.

Consider 72 Months If:

The lower payment meaningfully improves your cash flow and you're comfortable with the additional year of debt and potentially higher total interest.

Don't ask only:

“Which payment is lower?”

Ask:

“Which loan fits my overall financial situation better?”

That's the more important question.

Compare the Numbers Before You Decide

Before choosing between 60 and 72 months, compare:

Amount financed

APR

Monthly payment

Total interest

Total of payments

How long you plan to keep the vehicle

Then make the decision.

Sometimes the answer is obvious.

Sometimes paying an extra $80 per month to eliminate the loan a year earlier makes perfect sense.

Other times that $80 is better left in your monthly budget.

There isn't one correct answer for every buyer.

There is a correct answer for your situation.

Shopping for a Car in Wichita?

If you're trying to decide between 60 and 72 months—or you're trying to figure out what vehicle price fits the payment you want—I'm happy to help you run the numbers.

Send me:

• The vehicle price
• Your estimated down payment
• Trade value
• Trade payoff
• Approximate APR

and I'll help you understand how the different terms affect your payment.

Ask Andrew →

Or use the:

Car Payment Calculator →

to compare multiple loan terms side by side.

All payment examples are estimates for educational purposes only. Actual APRs, payments, loan terms, taxes, fees, trade values, financing programs, and approvals vary based on the lender, vehicle, creditworthiness, transaction, and other factors. This article is not financial advice or an offer of credit.