An 84 month car loan may seem appealing when you’re trying to keep monthly payments low. By spreading the cost over seven years, lenders make even expensive cars seem affordable. However, longer terms can mean paying more in interest and staying in debt far longer than necessary.
Understanding the full picture helps you decide whether this extended financing plan is right for your budget or if a shorter, smarter alternative would save you money in the long run.
What Is an 84 Month Car Loan?
An 84 month car loan is a type of auto financing that allows you to repay your vehicle over seven years. This long term financing option spreads the total cost of your car into smaller monthly installments, making expensive vehicles seem more affordable.
While the appeal of lower monthly payments is clear, the extended term often means paying significantly more interest over the life of the loan.
Why Are 84 Month Car Loans So Popular?
Over the last decade, car prices have risen sharply due to advanced technology, inflation, and higher manufacturing costs. Instead of opting for cheaper models, many consumers choose a longer loan term to keep payments within budget.
Additionally, lenders and dealerships often promote 84 month financing as a way to “afford” higher end vehicles without a huge monthly bill. This marketing strategy works because buyers focus on the payment amount rather than the total cost of the loan.
Pros of an 84 Month Car Loan
Although it’s not the best choice for everyone, an 84 month car loan can make sense under certain circumstances.
1. Lower Monthly Payments
The main advantage is the reduced monthly payment compared to shorter loan terms. This allows you to keep more money in your monthly budget for other expenses.
2. Ability to Afford a Better Vehicle
With a smaller payment, you may qualify for a newer or more luxurious model without straining your finances at least in the short term.
3. Easier Budget Management
If your income is steady but not high, a longer term loan helps free up cash for essentials like rent, insurance, and savings.
Cons of an 84 Month Car Loan
While the advantages are tempting, there are serious downsides you must consider.
1. Higher Overall Interest Costs
The longer you take to repay a loan, the more interest you pay. Even a small difference in rate can add thousands of dollars over seven years.
2. Negative Equity Risk
Cars lose value quickly, especially in the first few years. With an 84 month term, you could owe more than the vehicle’s worth for a long time, making it hard to sell or trade in early.
3. Long Term Commitment
Your financial situation or lifestyle may change over the next seven years, but you’ll still be locked into the same payment plan.
84 Month Car Loan vs. Shorter Loan Terms
When comparing loan terms, it’s essential to think beyond the monthly payment. For example, a 48 month loan will have higher monthly payments, but you’ll pay it off faster and save on interest.
Here’s a quick comparison:
| Loan Term | Interest Rate* | Monthly Payment (for $35,000 loan) | Total Interest Paid |
|---|---|---|---|
| 48 Months | 6% | $822 | $4,496 |
| 84 Months | 8% | $538 | $10,392 |
*Interest rates are examples and vary by credit score and lender.
How to Decide if an 84 Month Car Loan Is Right for You
While an 84 month loan is not ideal for most people, it might be suitable if:
You have a fixed, reliable income.
You plan to keep the car for the full term or longer.
You get a low interest rate despite the long term.
You’re committed to paying extra each month to shorten the term.
If these conditions don’t apply to you, it’s better to aim for a shorter loan term.
Tips for Managing an 84 Month Car Loan Wisely
If you choose an 84 month loan, there are ways to reduce its financial impact:
1. Negotiate the Purchase Price First
Dealers may focus on monthly payments to hide the total cost. Always negotiate the price of the vehicle before discussing financing.
2. Make a Large Down Payment
A bigger down payment reduces the loan amount and interest paid. Ideally, aim for 20% or more.
3. Pay Extra Toward the Principal
Even small extra payments can cut years off your loan and save you thousands in interest.
4. Avoid Rolling Over Negative Equity
Never add old loan balances into a new loan this increases debt and worsens depreciation issues.
Alternatives to an 84 Month Car Loan
If you’re concerned about long term debt, it’s worth exploring a few practical alternatives before committing to an 84 month car loan.
60 or 72 Month Loan:
Choosing a shorter loan term, such as 60 or 72 months, may slightly increase your monthly payments. However, you’ll benefit from significantly lower total interest paid over the life of the loan, allowing you to build equity in your vehicle much faster.
Lease:
Leasing can be an attractive option for those who prefer lower monthly payments and the flexibility to drive a new car every few years. Keep in mind, though, that you won’t own the vehicle at the end of the lease term, and there may be mileage limits and wear and tear fees to consider.
Buy Used:
Purchasing a quality pre owned vehicle can help you avoid the need for an extended loan term altogether. Since used cars often cost less than brand new models, you may be able to finance them over a shorter period without stretching your budget too thin.
Ultimately, the right choice depends on your financial goals, driving habits, and long term plans. Before making a decision, it’s wise to explore current auto financing rates from trusted sources such as Bankrate so you can compare loan terms, interest rates, and total costs. By doing so, you’ll be in a better position to choose the option that offers the most value and keeps your debt manageable.
Final Thoughts on 84 Month Car Loans
An 84 month car loan can make a dream car seem financially possible, but it’s not without risks. While the low monthly payment is appealing, you’ll pay significantly more over time and face potential negative equity.
If you do choose this path, be strategic: negotiate well, make extra payments, and ensure you’re financially stable enough for a seven year commitment. In most cases, opting for a shorter loan term even if it means buying a less expensive vehicle will be the smarter financial move.
