Can I Get Car Finance Over 5 Years?

Amazing news! 🎉 You've found your next new car! 🚙 So you want to borrow money for your exciting new motor over a longer-term? Not a problem! When looking for a car loan, you need to go for one that you can afford. Financial lenders offer loans with varying repayment terms and interest rates, depending on the option you choose. The longer the payment period, of course, the lower the monthly payments. But of course, you will pay more interest in the long run.

Independent financing such as personal loans offers buyers car finance for over 5 years, sometimes with no deposit. On the other hand, dealership financing can provide shorter-term periods between 1 to 5 years. However, the landscape of this is changing, with some dealers giving more time for loan repayment.

Selecting an auto loan for your car affects your credit, monthly finances, and ability to sell the vehicle in the future. Some financial institutions could even give you a loan for up to 7 years. Let’s take a look at how that works.

How To Get Car Finance Over 5 Years

The best way to get zero deposit car finance for over 5 years is to apply for a personal loan. A bank can provide you with an auto loan at a reasonable rate if your credit history is excellent. Once you get the cash, you can spend it on either a brand new or used car.

Before applying for one of these packages, here are some key things to consider.

Check Different Options

A bank may give you credit to pay back in 7 years. This means your overall interest will be higher due to the more extended payment period. Therefore, it's best to shop around for the best interest rates and annual percentage rate (APR). Having this figure in advance makes it easier for you before you approach the dealership.

Confirm Total Cost

As you do your research, find out the monthly repayment amounts you need to make. Depending on the contract agreement, if you can’t afford high monthly charges, go for a longer loan term to allow you to pay back comfortably. This information enables you to select the option that will cost you less in the long run.

Monitor Your Credit Score

Before you get any car finance over 5 years from a bank or a credit union, they must check your credit history. Applying for a loan could affect your rating, especially if your score is poor. You can protect yourself by using an eligibility calculator to do a "soft" search on your credit score. This is not registered against you.

Check Interest Rates

Some lenders provide fixed interest rates throughout the loan period, while others are variable. With variable interest rates, the amount you need to pay goes up and down at different times, it can be a lower rate but can go up or down!  It's best to pay attention if you take this type of car finance to ensure that you can afford it even if the rates are higher.

How Personal Loans Work

A bank loan offers you no limits on where you purchase the car. Once your application is approved, the cash is deposited into your bank account directly. You can now approach a dealership or private seller to pay for your vehicle.

Once the agreement is signed with the bank, they will draw up a payment schedule to make repayments. A loan period over 5 years means of course that you will make lower monthly payments until the loan is fully paid back.

Pros Of Car Finance Over 5 Years

No Deposit

Personal loans from banks require no deposit when applying for car finance. Unlike getting loans from the dealership, you pay no down payment when getting the cash. The amount is spread out in monthly repayments.


With this type of financing, you can choose your repayment period. Typically, lenders offer between 1 and 7 years. You can choose the loan period you are most comfortable with according to your income.

Low Monthly Payments

When signing up for car finance to be paid over 5 years, the amounts you must pay each month will be lower than over a shorter term. This is because you have a more extended period to finish paying up the loan. If you can't spend lots of cash each month, this is the best option for you.

Simple Plan

Personal loans are straightforward and easy to understand. The terms of conditions for the loan are unambiguous, unlike hire purchase or personal contract purchase plans. Besides, you can arrange to get the loan via phone, email, or in-person making it very accessible.

Car Ownership

Since your repayment period is over 5 years, you need to own the car fully. Personal loans are an excellent choice because they give you ownership even when still servicing the loan. Therefore, you can modify it to your liking.

Cons Of Car Finance Over 5 Years

Car Depreciation

A car is a depreciating asset. If you take a loan for 6 or 7 years, your vehicle will have gone through wear and tear before you can sell it. The value will be much less than when you bought it.

You could also suffer from car fatigue, especially if you change or sell cars often. If this is the case, a more extended loan period ties you down; it's better to lease or use other forms of car financing.

High-Interest Rate

As much as you make lower payments with an extended loan period, the interest will be high in the end. If you choose to take car finance for over 5 years, the interest rate and finance charges are more over time.

Extra Costs

Because you fully own the car, you are responsible for all the repairs. You need to cover any wear and tear on the cover and maintenance to keep the car running efficiently.


As long as your credit score is excellent and the loan is affordable to you, getting car finance for over 5 years is relatively straightforward. 

Make sure to shop around to get the best deal before settling on one. When you sign up for these long loan terms, it's best to remember that you will pay low amounts each month but incur higher interest rates in the long run.

If you want to know more about car finance or if you have any questions for us, please feel free to reach out! to us at Carmoola. We are only too happy to help you along your car buying journey.