Can I Get Car Finance Over 7 Years?

Hoping to get your car loan repayments as low as possible? 😀 But is a long term loan the right choice to make? 🤔 When looking for good car finance deals, you’d probably go for ones with the lowest monthly repayment amount. That’s a good way to assess car finance offers. However, are those really the best deals for you? You may be paying an affordable amount every month but how many years would you be repaying the loan? How much interest will be you be paying for the privilege? Car finance spread over 7 years may seem like a great arrangement, but you may end up paying more than what the car is actually worth!

Can You Get a Car Loan for 7 Years?

Some car buyers pay the full amount in cash while there are others who would rather spread out the payments over a period of years. These car buyers get car financing from lenders so that they can purchase the vehicle they want for an affordable monthly payment arrangement. The car loan terms may range from 12 months to 84 months, or 7 years.

With the interest rate that you and the car finance company agreed upon, your loan will be amortised over the particular repayment term you’ve chosen. Through this process, the amount you have to pay every month will be determined. The amount includes the principal as well as the interest. By the end of the loan term, the outstanding balance will be zero and you’d have completed your repayment for car finance. 

Here’s an example to illustrate this concept. If you buy a car for £20,000 and decide to get car finance for the whole amount at a 3.49% interest rate, an 84-month loan term would mean you have to pay £269 every month for the next seven years. If you choose a shorter loan term, the monthly payment amount would go up but you will finish repaying the car finance company sooner and therefore pay the lender less interest.  

Should I Get a Longer Car Loan Term?

You have to consider a number of things before you decide on the car finance term, such as the amount you’ll borrow and the interest rate, as well as your budget. Check out this car finance calculator so you’ll have an idea of the numbers. The car dealership may try to convince you to choose a longer loan term but try not to get persuaded too easily. Weigh your options carefully first. 

You can enjoy some benefits to a long term loan, including a lower amount for the monthly payments and a lower debt-to-income ratio. This ratio is the percentage of your monthly income that is spent on debt repayments. If you have a 7-year car finance term, then your monthly repayments will be smaller in relation to your monthly income. A benefit to this is that you’ll find it easier to be qualified for car financing and other loans. 

Downsides of a 7-Year Car Loan

Clearly, there are advantages to getting the 84-month car finance. However, you also have to be aware of the potential downsides so there won’t be any surprises along the way. You may have to consider the cost, depreciation of the vehicle, repair issues, and warranties. Let’s look at them more closely.

Higher Overall Cost

The amount for your monthly repayments will be much more affordable if you choose a 7-year car loan term. But keep in mind that the total interest you’ll be paying will be higher. For example, if you have a five-year car finance term to pay £20,000 with 3.49% interest, the monthly repayment amount would be £364. That amounts to £21,825 total, so you would have paid £1,825 for the interest. 

Now, let’s see how this goes for a 7-year car finance term. If the monthly repayment amount is £269, that’s much lower than the amount for a five-year loan term. However, you would have paid a total of £22,571 by the end of your contract. That’s £2,571 for the interest which is almost double the amount you’d pay for a shorter loan term. 

Consider Depreciation

Most new cars lose more than 10% of their value during the first month that they’re taken from the dealership. During the first year, the car will lose 20% of its value, and then 60% when it reaches its fifth year. If you have a lower monthly repayment amount, then you’re increasing the risk of owing more money than what your car is actually worth.  

Be Ready for Repair Costs

As your car gets older, the repair costs will be more expensive. So, if you choose a 7-year car finance term, it’s possible that you’ll be spending more of your own money for repairs while you’re still paying the car finance company. Imagine if you don’t have extra cash and little to no emergency funds, you may be facing a very stressful situation. This aspect is particularly important to consider if you are not buying a brand new car.

Warranty Expiration

New cars typically have warranties but they only last for three years or less. Although some manufacturers have been known to offer 5-year warranties so keep a lookout! Having a 7-year car finance agreement means you would still be paying the lender long after your car’s warranty has expired. Ideally, you’d want the length of the warranty and your car finance term to be the same. So, if the warranty is good for three years, try to prepare for a three-year car loan term. 


Now that you know the facts of getting longer-term car finance, you’ll be able to make the best choice for you when choosing the length of the term. If you can avoid a 7-year term, it would be much better for your finances. You may choose to wait so you can save some more and pay a significant amount for the downpayment. That way, you’ll have lower monthly repayments. You can take up to a 5-year term with Carmoola, and you can use our car financing calculator to have an idea of your lending amount.  

You may also choose a cheaper vehicle so you can afford a shorter car finance term or even pay in cash. Another option is to choose car leasing rather than buying a car. If you feel you’re not ready for the financial commitment you need to make, then you can lease a car instead. It usually has a shorter term and also lower monthly payments. Before you jump into any financial commitments, always see to it that you weigh up the pros and cons. 

If you want to learn more about car finance and other tips to get the best deals, check out Carmoola’s blog! Also, an application via our app is so quick and easy - you'll know the result almost instantly.  Take advantage of our flexible schemes of spreading the cost of your purchase. Good luck with your car hunting! 👍🚘