The best auto loan rates for 72-month terms in 2024: How to find competitive six-year APRs (2024)

Financial experts recommend selecting the shortest loan term you can realistically afford, but with the high price of cars these days, many borrowers need the lower monthly payments that come with a longer term. In fact, 71% of all used auto loans had repayment terms of 72 months or longer in the first quarter of 2024, according to Experian.
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A 72-month auto loan can result in lower monthly payments since the loan amount is spread across a longer period. However, longer terms often come with higher interest rates since they’re riskier for the lender. And since there’s more time for interest to accrue, you’ll pay more in interest charges over the life of a longer loan.
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Before you commit to a six-year repayment term, crunch the numbers on a shorter term to determine whether it’s a better option. You may be able to afford a shorter term by making a larger down payment or improving your credit score to qualify for lower interest rates (which reduce your monthly out-of-pocket costs).

Should I get a 72-month auto loan?

According to many financial experts, the ideal auto loan repayment term is 48 months or shorter for most borrowers. But with car prices near all-time highs, a long repayment term may be necessary to make your vehicle purchase affordable.

Keep in mind that you’ll pay more in interest over the life of a longer loan. Longer loan terms are riskier for lenders since you have more time to potentially default on the loan, and lenders charge higher interest rates to account for this risk. So, while your monthly payments may be lower, your overall cost of borrowing is much higher than it would be on, say, a 48-month term.

However, a 72-month auto loan may be a good idea if you’re on a tight budget and don’t want to compromise by getting a less expensive car. Look for lenders that offer rate discounts and don’t charge a prepayment penalty, in case you’re able to repay the loan ahead of schedule.

When should I avoid a 72-month term?

• If you can afford a shorter term: There’s not much sense in signing on to pay a higher amount of interest if you can afford the monthly dues that come with a shorter loan term. The shorter your term, the less expensive borrowing is likely to be.
• If you’d be underwater on the loan: Cars are depreciating assets, which means they’re almost always losing value. With a long loan term, it’s likely that depreciation will outpace your repayment, which means you’d owe more than the car is worth. If you try to sell the car before the loan term is up (or total the vehicle), you’ll still owe money on your auto loan (unless you bought gap insurance).
• If you have bad credit: Even if a 72-month auto loan is the only way you can afford a car, it can be a risky choice if you have bad credit. The interest rates you’ll receive as a subprime borrower are already likely to be high, and selecting a long loan term (if you qualify) will push them even higher. If your credit needs work, you’re better off working to improve your credit scores, finding a co-applicant or buying a less expensive car.

Comparing a 72-month loan to other repayment terms

Your auto loan term and interest rate combine to determine your monthly and total borrowing costs. Notice how the total amount of interest rises with longer terms on this $40,000 auto loan:

Sure, your monthly payment will be lower on a 72-month auto loan. But you’ll pay $5,255 more in interest charges than if you’d chosen the 36-month option, significantly increasing your cost of borrowing. Your budget can guide your loan choices — if you need to keep your monthly dues under $1,000 a month, the four-year loan term may be the best option.

Tip: Use an auto loan calculator (like Calculator.net’s) to estimate your monthly payments and help you find the shortest affordable term.

A 72-month auto loan can be worth considering if it’s the only way you can afford a reliable car. Longer loan terms are becoming increasingly common, so it may be possible to find an affordable APR, especially if you have excellent credit and can make a large down payment.

The biggest trade-off with a 72-month auto loan is the higher overall cost of borrowing. Interest has more time to accrue with a longer term, and lenders typically reserve their lowest rates for their shortest repayment periods. There’s also a higher risk of ending up underwater on the loan if your car depreciates faster than you repay the debt. And since most bumper-to-bumper warranties expire after five years, you’re at higher risk of having to pay for costly repairs out of pocket toward the end of your repayment period.

Where can I find a 72-month auto loan?

Even though a shorter loan term is best for minimizing total borrowing costs, most lenders offer long repayment options. This means you can find 72-month terms with nearly any lender that offers auto loans.

Credit unions

Best for: Low interest rates

These nonprofit, member-owned financial institutions are known for offering some of the lowest loan rates on the market. The average auto loan rate from a credit union is often a full percentage point lower than the average rate offered by banks, according to National Credit Union Administration data. That partially explains why five out of the eight lenders on our list are federal credit unions.

Credit unions also tend to have flexible terms and less stringent eligibility criteria. The biggest downside is that you must be a credit union member to receive auto loan funds. Membership requirements vary by institution — some are open to all consumers who make a small deposit or donation, while others require you to live in a certain community or work in a specific industry.

Banks

Best for: Excellent credit

Although bank loan rates tend to be slightly higher, they are often a more popular financing option than credit unions. This could be due to their reputation for customer service and online and mobile banking. You don’t have to be a current customer to apply, though some banks offer relationship discounts. Most banks also offer APR discounts if you enroll in autopay.

However, banks tend to have strict eligibility criteria and are best for borrowers with strong credit. The time it takes to approve and fund your loan may also take longer with a bank than with other types of lenders.

Online lenders

Best for: Fast funding

Many online auto lenders have streamlined application processes, fast approvals and quick funding timelines. Since they don’t have the higher overhead costs of brick-and-mortar institutions, they can afford to offer competitive interest rates. Plus, you have more options when it comes to online lenders, making it easier to shop around.

However, without physical branch locations to visit, you may find online lenders’ customer service options lacking. And rates for bad credit borrowers tend to be much higher since you don’t have a long relationship with the lender.

Dealer-arranged financing

Best for: Convenience

When you buy a car, the dealership’s finance department may offer in-house financing through its lending partners. Getting your car and loan in the same place is certainly fast and convenient, but you’ll likely pay a premium for the service in the form of higher rates. Plus, there’s no guarantee that you’ll receive the best offer you qualified for — instead, the dealer may choose to present the offer that pays them the highest commission.

Captive lender

Best for: Promotional offers for borrowers with great credit

A captive lender is the financing arm of an automaker that provides loans or leases for its vehicles. For example, Toyota Financial Services offers loans for Toyota vehicles via Toyota dealerships. Like dealer-arranged financing, captive lending is conveniently handled during the auto purchase.

The biggest benefit of a captive lender is that they often offer cash rebates on certain models or promotional financing deals, like 0% APR, to help move cars off dealer lots. Captive lenders dominate the new car loan market, accounting for more than half of all loan originations in the first quarter of 2024, according to Experian.

However, these deals are only available to “well-qualified buyers,” or borrowers with credit scores in the high 700s or 800s with low amounts of debt. And captive finance companies usually only offer short-term loans, so a 72-month auto loan may not be an option.

5 tips for snagging a low auto loan rate

1. Improve your credit

The best way to qualify for a low auto loan rate is to apply with strong credit scores. While you may be approved with scores in the 500s, having excellent credit can significantly reduce your quoted interest rate and overall cost of borrowing.

Improve your credit scores by paying your bills on time, maintaining low (or no) balances on your credit cards and avoiding unnecessary credit applications.

Related >> Auto loan rates by credit score

2. Shop around and compare lenders

Auto loan rates and fees vary by lender, and you could be leaving money on the table if you only receive one rate quote. It takes more time and effort to browse the market, but you’ll likely end up with a much lower interest rate, saving you money over the life of the loan.

To find the loan with the lowest APR and most favorable terms, get preapproved with at least three lenders. The more lenders you apply with, the more certain you can be that you found the best loan.

Each preapproval application can drop your credit scores by about five points, according to FICO — unless you submit all inquiries during a 14-day period. The credit unions will bundle similar inquiries into a single hard credit pull if they’re confined to this “rate-shopping” window.

3. Make a larger down payment

Your loan-to-value (LTV) ratio measures the amount of your vehicle’s value that’s financed with an auto loan. For example, if you make a 10% down payment, your LTV is 90%. The higher your LTV, the riskier the loan — in the lender’s eyes, you’re more likely to default on the loan because you don’t have as much invested in the vehicle.

Not only does a large down payment reduce the amount you have to borrow, but it also lowers your LTV and improves your chances of qualifying for a competitive rate. A down payment of at least 20% may protect you from becoming upside down and unlock the lowest rates.

Bottom line: Yes, you can buy a car with no down payment, but you won’t get the lender’s best rate.

4. Consider a shorter loan term

If you’re shopping for a 72-month auto loan, you’re unlikely to get the lowest interest rate available. That’s because lenders attach higher rates to longer loan terms because the risk of default is higher.

If snagging the lowest rate is your highest priority, shop around for shorter loan terms, typically 48 months or less. But remember that a shorter term translates to higher monthly dues, so be sure you can afford the payments.

5. Get a co-applicant

Even if you have good credit, adding a co-applicant to your loan can help you access lower rates because more than one borrower guarantees repayment. Plus, the lender considers your co-borrower’s credit history and income as well. If your credit scores are lower, applying with a creditworthy co-applicant can help you secure lower interest rates.

Asking another person to cosign or co-borrow your auto loan is no small request. If you fail to keep up with the payments, your co-applicant’s credit will be damaged and they will be responsible for repayment. Plus, unlike a cosigner, a co-borrower shares equal access to the vehicle.

How to apply for an auto loan in 6 steps

1. Determine your budget. Assess how much you can afford to pay in monthly loan payments. An auto loan calculator can help you estimate your monthly loan payments, and you can use a budgeting app to help you track your spending and set savings goals. When you understand your budget, you can determine the type of car you can buy and loan terms that make sense.
2. Check your credit. Since your credit scores are such a crucial factor in determining your auto loan rate, it’s good to know where you stand. Your bank or credit card issuer may let you check your credit scores for free, or you can buy them from a third-party service. Also, pull your credit reports via AnnualCreditReport.com and dispute errors if you find them.
3. Get preapproved with multiple lenders. Knowing your credit scores makes it easier to identify lenders that might be a good fit. Submit auto loan applications with at least three lenders, and be sure to apply with at least one bank, credit union and online lender to get a wide variety of options.
4. Compare loan offers. In addition to comparing monthly payments, look at each loan’s total cost of borrowing. The best loan is the one that offers the lowest overall cost with a monthly payment that fits comfortably into your budget. Also look for lenders that offer rate discount opportunities, highly rated customer service and any other perks or loan features that are important to you.
5. Shop for a car. After you’ve homed in on a lender, begin shopping for a car that fits within your budget. You can also ask the dealership to beat your preapproved offer — they might offer a lower rate to win your business. (And if they can’t, you can rest easy knowing you’ve found a great deal.)
6. Finalize the loan. Review the loan contract carefully before signing on the dotted line to ensure it matches expectations. Don’t be afraid to ask questions or raise concerns, and confirm your first loan payment due date. Your lender will transfer the funds to the dealership or give you the next steps for finalizing the purchase.

Methodology

Our editors and research analysts combined efforts to identify the best 72-month auto loan rates. First, our editors created a rubric to assess 23 popular lenders across 27 criteria. Then, our research team collected over 600 data points and analyzed the results to narrow our list to the eight best lenders.

Loan cost (35%)

Many borrowers cite cost as the most important factor when borrowing money. With that in mind, we awarded points to lenders that offer the lowest interest rates (including competitive APRs for 72-month terms), fewer fees and more opportunities for rate discounts.

Loan details (30%)

Here, we took a deep dive into each lender’s auto loan product. Since you’re looking for a 72-month repayment term, we heavily favored lenders that offer that option. We also considered features like:

• Loan amounts offered
• Availability of private-party loans
• Funding timeline

Lenders with the widest variety of options and the fastest funding rated well.

Eligibility (20%)

The best auto loan is available to the broadest range of borrowers. This category examined lenders’ eligibility criteria for both borrowers and vehicles, including:

• Nationwide availability
• Credit score requirements
• Vehicle age and mileage restrictions
• Whether cosigners and co-borrowers are permitted

Customer experience (15%)

Finding an affordable loan is top of mind, but once you enter repayment, you want a trusted lender that offers great customer service. In this final category, comprising eight factors, we aimed to capture the quality of each lender’s service by assessing criteria like customer support hours and whether the lender offers a robust mobile app and a fully online application. We also analyzed consumer reviews and complaints from independent organizations like the Better Business Bureau and the Consumer Finance Protection Bureau.

What didn’t make the cut

Fifteen popular lenders didn’t make our list of best auto loan rates for 72-month terms, including the following industry leaders. Most auto lenders that didn’t score highly lacked transparency, failing to disclose key details like APR, loan amounts and eligibility requirements.

• Capital One, Chase Bank and Ally Bank don’t disclose their auto loan interest rates.
• Tenet is only available for electric vehicle financing.
• U.S. Bank doesn’t offer 72-month terms and isn’t available in all states.
• Wells Fargo has a poor customer service and regulatory record.

Frequently asked questions (FAQs)