A 10-year car loan is possible, but you won’t find one at a major national bank. Financing stretched to 120 months lives at the far edge of the auto lending market, offered mostly by certain credit unions and specialty lenders, and it carries real financial costs that the lower monthly payment hides.
Who Actually Offers 120-Month Auto Loans
Major national banks cap their auto terms at 72 or 84 months. Those timelines roughly track how quickly a vehicle loses value, and lending past that point means the car could be worthless before the loan is paid off.
Credit unions are the most realistic source for a decade-long term. Because they’re member-owned and set their own risk tolerances, some offer 120-month financing on qualifying vehicles. Americo Federal Credit Union, for example, offers terms between 85 and 120 months with a minimum financed amount of $30,000 and a requirement that the vehicle be a 2022 or newer model year.1Americo FCU. Vehicle Rates LOC Credit Union similarly advertises terms up to 120 months based on vehicle year and loan amount.2LOC Credit Union. New and Used Auto Loans Each lender sets its own vehicle age, mileage, and loan amount thresholds.
Specialty lenders in the classic car and exotic vehicle markets also offer extended financing, since a vintage Porsche or modern supercar holds value differently than a typical sedan. Marine and RV financing companies occasionally cross into the auto space for high-value vehicles like luxury conversion vans, where 15- and 20-year terms are already standard.
What It Takes to Qualify
Lenders that go to 120 months set the bar well above a standard 60-month loan. Expect to need excellent credit, generally a FICO score in the mid-700s or above, and a clean payment history. Your debt-to-income ratio matters too; keeping total monthly debt payments well below 40% of gross income strengthens your position.
The vehicle itself has to qualify, and this is where many buyers hit a wall. Lenders typically restrict 120-month terms to new or near-new cars. Navy Federal Credit Union only allows terms beyond 84 months for vehicles with fewer than 7,500 miles on the odometer.3Navy Federal Credit Union. Auto Loan Refinancing – See Options and Todays Rates Americo FCU requires a 2022 or newer model year and at least $30,000 financed.1Americo FCU. Vehicle Rates A lender won’t tie up ten years of credit on a car that’s already five years old with 60,000 miles.
What the Lower Payment Actually Costs
The monthly payment on a 10-year loan looks attractive in isolation. On a $40,000 loan at 8%, you’d pay roughly $485 per month over 120 months versus about $790 per month over 60 months at 6%. That $305 a month feels real on a household budget.
The totals tell a different story. The 60-month loan costs you roughly $7,400 in interest. The 120-month loan costs approximately $18,200. You pay nearly $11,000 more for the same car.
Interest rates also climb with loan length, which compounds the damage. Data from early 2026 shows that even the jump from 60 to 72 months can add over a percentage point to your APR.4Broadview Federal Credit Union. Current Used Car Loan Rates – 2026 Guide Extending to 120 months pushes rates higher still, and the longer the term, the more slowly you pay down principal in the early years, because a larger share of each payment goes toward interest.
You’ll Owe More Than the Car Is Worth for Years
A new car loses roughly 24% of its value in the first year, another 11% in year two, and about 10 to 14% annually after that, according to Bureau of Labor Statistics data.5Bureau of Labor Statistics. Chart 1 – Annual Depreciation Rates by Automobile Age By year five, a $40,000 car is typically worth somewhere around $15,000 to $17,000. On a 120-month loan, your remaining balance at that point would still sit near $23,000 to $25,000. That’s $6,000 to $10,000 of negative equity.
Negative equity creates a trap. If the car is totaled, your insurance pays the vehicle’s current market value, not what you owe on the loan, and you cover the difference out of pocket. If you need to sell or trade in before the loan ends, you’d have to write a check to cover the shortfall. The Federal Trade Commission warns that rolling negative equity into a new loan only deepens the problem.6Federal Trade Commission. Auto Trade-Ins and Negative Equity – When You Owe More Than Your Car Is Worth
Why GAP Insurance Stops Being Optional
Guaranteed Asset Protection insurance covers the gap between what your regular auto insurance pays after a total loss and what you still owe on the loan. On a short loan it’s optional. On a 120-month term where you’ll be underwater for years, skipping it is a serious gamble. The Consumer Financial Protection Bureau notes that GAP pricing varies widely, and your own auto insurer may offer it for less than the dealership charges.7Consumer Financial Protection Bureau. What Is Guaranteed Asset Protection (GAP) Insurance Financing GAP into the loan itself increases your total interest cost, so paying for it separately is usually the better move.
Full-Coverage Insurance for a Full Decade
Any lender financing your vehicle requires you to carry full coverage, including comprehensive and collision, for the life of the loan. On a 60-month loan that’s five years. On a 120-month loan, you’re locked in for a decade, even as the car’s value drops to a fraction of what you paid. By year eight, you might be paying $1,200 or more annually to insure a car worth $6,000. On a shorter loan, you’d own the vehicle outright by then and could drop to liability-only coverage.
Paying Early Is Allowed; Refinancing Is Harder Than It Sounds
Federal law prohibits prepayment penalties on auto loans with terms longer than 60 months. If your situation improves and you want to pay off the 120-month loan early, no lender can charge you a fee for doing so. Making extra principal payments is one of the smartest ways to offset the cost of a long term.
Refinancing is a different story. Lenders that refinance auto loans impose their own vehicle age and mileage limits. Navy Federal, for example, won’t extend terms beyond 84 months for vehicles with more than 7,500 miles and classifies cars 20 years or older as classic vehicles with different rate structures.3Navy Federal Credit Union. Auto Loan Refinancing – See Options and Todays Rates Five years into a 120-month loan, your car could easily have 50,000 to 75,000 miles. Many refinance lenders will reject the application outright or offer terms that don’t meaningfully improve your situation. The window to refinance into something better is narrow and closes faster than most borrowers realize.
When a 10-Year Loan Makes Sense, and When It Doesn’t
A 120-month term is defensible in a narrow set of circumstances: you’re buying a high-value vehicle that depreciates slowly, you have the credit profile to secure a competitive rate, and you plan to make extra payments to shorten the actual payoff timeline. Collectors financing a classic car that appreciates over time, or buyers of specialized commercial vehicles with long useful lives, fit that profile reasonably well.
For most new-car buyers, the math works against you. The average American borrows about $43,600 for a new vehicle. Stretching that over 120 months means paying years of interest on a car that’s losing value faster than you’re building equity. A shorter term with a larger down payment, or a less expensive vehicle you can finance over 60 months, almost always leaves you in a stronger financial position. The monthly savings from a 10-year term feel real, but they come at a price that compounds quietly for a decade.