That low car payment could cost you more in the long run. A lot more.

You’ve probably heard this at a dealership: “Don’t worry about the price — we’ll get the payment where you need it.”

These days, that “magic” often comes from stretching a car loan to 84 months — seven years of payments on something that may not feel new for even half that time. With average new-car prices near $50,000 and household budgets tight, the question is whether these ultralong loans are a clever way to manage cash flow or a slow-motion financial trap.

About a quarter of all car loans now run longer than 72 months, according to Cox Automotive data.

Why 84-month loans are tempting

On paper, the appeal is simple: an 84-month loan lowers your monthly payment compared with a more traditional 36-, 48- or 60-month term.

Imagine financing $35,000 for a car. On a shorter loan, the payment might be in the $700-plus range. Stretch that loan to 84 months and the bill can drop by $150 or more. When you’re juggling housing, groceries and child care, that savings feels huge.

Many sales pitches revolve around one number: “What monthly payment are you comfortable with?” Once you answer, the dealer stretches the term until the math works. The car doesn’t get cheaper. You’re just renting the money for longer. With prices high for both new and used vehicles, the low payment can look like the only path to a newer, safer car.

But what feels like relief today can be expensive over time.

The hidden costs: Interest and negative equity

The biggest downside of an 84-month loan is the total interest you pay. Lenders typically charge a higher APR for long loans, but even if the interest rate matches a shorter-term loan, stretching payments over seven years usually means paying thousands more. You’re not just spreading out the cost — you’re increasing it.

Then there’s negative equity — owing more on the car than it’s worth.

Cars lose value fastest in the first few years. With an 84-month loan, your balance shrinks slowly, especially early on, when much of your payment goes toward interest. Three or four years into the loan, you might need a different car. It’s worth $18,000, but you still owe $23,000.

That $5,000 gap doesn’t disappear. Often, it gets rolled into your next loan. Now you’re financing a new car plus leftovers from the old one. Repeat this cycle, and each trade-in buries you a bit deeper. The long loan didn’t just cost more in interest — it made it harder to ever get back to even.

Also, guaranteed asset protection is often required for long loans. Known as GAP insurance, this coverage helps if the car is totaled in year three, for example, and the standard insurance check won’t cover the loan balance, leaving them paying for a car they no longer have.

When an 84-month loan might make sense

Still, an 84-month loan isn’t always a terrible idea. For some borrowers, it can be a tool rather than a trap.

It might be reasonable if:

• Your income is stable and your finances are solid, with an emergency fund and manageable debt.
• You’re getting a truly low interest rate. If the rate is competitive and shorter terms would strain cash flow, an 84-month loan can help you avoid raiding savings or running up credit cards.
• You plan to keep the car for a long time. You’re the “drive it until the wheels fall off” type, not someone who trades in every few years.
• You’re disciplined enough to pay extra. Take the 84-month term for flexibility but pay it like a 60-month loan when you can by adding to the principal.

Red flags that it’s a trap

For many households, the long loan is a warning sign. Be cautious if any of these sound familiar:

• You needed the 84-month term mainly to afford a pricier car or higher trim level.
• You don’t have an emergency fund, and a surprise expense could derail your payments.
• You tend to trade vehicles every three to four years.
• You’re already rolling negative equity from your last car into this one.
• The interest rate is high, so the extra years significantly inflate the total cost.

If several of these apply, the low monthly payment isn’t a win — it’s a bandage over a deeper affordability problem.

Another affordability consideration: By year six or seven, the warranty is usually gone, but the monthly payment remains. Paying $550 per month for the car plus $1,000 for a new transmission is a common crisis point for long-term borrowers.

Smarter alternatives

If the 84-month loan looks risky, you still have options:

• Buy less car, not more time. Choose a more modest model or a reliable used vehicle so you can keep the loan to 48-60 months.
• Boost your down payment. Even a bit more up front can lower your payment and reduce the chance of being upside down later.
• Shop around for financing. Don’t rely only on the dealer. Your bank or credit union may offer better terms, so check rates and get prequalified.
• Delay the purchase if you can. Six months or a year of saving can shift the math, especially if you’re close to paying off other debt.