The Pros and Cons of 96-Month Car Loans
A 96-month car loan? Yep, it’s a thing—and it’s becoming more common in Canada, especially as car prices rise and more buyers look for ways to shrink their monthly payments.
But is stretching your car loan across eight years a smart move? Or are you setting yourself up for long-term financial headaches?
If you're shopping for used car loan rates, applying for vehicle loan approval, or simply plugging numbers into an auto loan calculator Canada tools provide, this blog breaks down the real pros and cons of a 96-month loan—so you can decide if it’s worth it.
What Is a 96-Month Car Loan?
It’s exactly what it sounds like: a loan with a term of 96 months, or 8 years. While most car loans in Canada are between 48–72 months, longer terms like 84 and 96 months are increasingly available—especially for those financing newer vehicles with higher sticker prices.
But just because it’s offered doesn’t mean it’s the best fit for you.
✅ Pros of a 96-Month Car Loan
1. Lower Monthly Payments
This is the biggest reason buyers consider longer-term loans. By spreading out the cost, your monthly payment goes down—sometimes by hundreds of dollars.
Example:
$35,000 loan at 7%
60 months = ~$693/month
96 months = ~$467/month
That’s $226 less per month, which can make a big difference for your monthly budget.
2. Access to More Vehicle Options
Lower monthly payments may allow you to consider a better car—newer, safer, or more fuel-efficient—that might’ve been out of reach with a shorter loan.
If you're working with tighter income but strong employment, a longer loan can help you get vehicle loan approval for a higher-priced model.
3. Flexibility for Other Financial Goals
Lower payments may free up cash to invest, save, or pay off higher-interest debt. If you're disciplined, this flexibility can help you balance other parts of your financial life.
❌ Cons of a 96-Month Car Loan
1. You’ll Pay Way More in Interest
Lower payments come at a price: more interest over time.
Example:
$35,000 at 7% over 60 months = ~$6,620 interest total
Same loan over 96 months = ~$10,800 interest
That’s a difference of $4,180—money that could’ve stayed in your pocket.
Plug those numbers into a monthly car payment calculator to see for yourself how longer terms cost more overall.
2. Negative Equity Risks
With longer loans, your car depreciates faster than you can pay it off. That means you might owe more than the car is worth for several years—a situation called negative equity.
This becomes a problem if you:
Want to trade in early
Total the car in an accident
Need to refinance down the road
You could end up carrying debt into your next vehicle—never fully catching up.
3. Higher Used Car Loan Rates
Lenders see longer loans as riskier—so you may not qualify for the best used car loan rates with a 96-month term. In fact, some lenders may not offer terms that long on used vehicles at all.
The sweet spot for used vehicle financing usually falls between 48–72 months.
4. You’re Tied to the Same Car for a Long Time
Life changes. Needs shift. And while your car might suit you now, who knows how you’ll feel in 6–8 years?
A 96-month loan makes it harder to switch vehicles without rolling over debt. If you plan to upgrade every few years, this loan length might backfire.
When a 96-Month Car Loan Might Make Sense
You need the absolute lowest monthly payment
You’re buying a newer car with a long lifespan
You’re confident you’ll keep the car long-term
You plan to pay it off early (but want the lower payment flexibility now)
In these cases, it’s crucial to use an auto loan calculator Canada drivers trust. Estimate your total interest and monthly commitment before you commit.
When You Should Avoid It
You're buying used or high-mileage vehicles
You want to trade in or upgrade within a few years
You're already carrying other debts
You can afford a higher payment with a shorter term
If you're unsure, it's worth exploring vehicle loan approval with multiple lenders and comparing 60-, 72-, and 96-month options side by side.
Final Thoughts
A 96-month car loan might look great on paper—especially with that low monthly payment—but it comes with trade-offs that could cost you more in the long run.
Use a monthly car payment calculator to test different terms. Run your numbers with used car loan rates, factor in depreciation, and ask yourself how long you really want to keep the car.
And if you're ready to shop or refinance? AutoPlug helps Canadians compare offers, calculate payments, and choose smarter loan terms based on real-world budgets.
