A 97 month car loan is one of the longest auto financing terms available, typically spanning over eight years. These extended-term loans aim to reduce monthly payments, making high-cost vehicles more manageable for some buyers.
However, they often increase total interest paid over the life of the loan and carry specific risks related to vehicle depreciation and financing costs. This guide explains how 97 month loans work, their advantages and disadvantages, and offers insights into safer alternatives.
1. How a 97 Month Car Loan Works
Long-term car loans work like standard auto loans but stretch payments over 97 months instead of the more typical 36–72 months. The principal is divided into monthly installments, and interest accrues each month. Extended terms often result in lower monthly payments but increase total interest due. Tools like Bankrate Auto Loan Calculator or Experian Auto Loan Tools can help estimate total costs and monthly obligations. Longer terms may also include prepayment penalties or higher interest rates set by banks or credit unions.
2. Pros of 97 Month Car Loans
- Lower Monthly Payments: Spreading repayment over eight years can reduce monthly financial pressure.
- Access to Higher-Priced Vehicles: Buyers may afford a more expensive car without increasing monthly expenses.
- Flexible Cash Flow: Useful for borrowers who prefer maintaining liquidity for other expenses.
3. Cons and Risks of Long-Term Auto Financing
- Higher Total Interest Paid: The extended term results in more interest over the life of the loan.
- Negative Equity Risk: Cars depreciate faster than the loan balance decreases, increasing risk of owing more than the car is worth.
- Potential Loan Qualification Limits: Lenders may require higher credit scores or down payments for 97 month loans.
- Depreciation and Resale Concerns: The car may lose significant value before the loan is fully repaid, affecting trade-in or resale options.
4. Real-World Considerations
Experts from the Consumer Financial Protection Bureau recommend comparing extended-term loans with shorter options to understand total costs. If your monthly budget is tight, consider whether a 72-month loan with a slightly higher payment may be more economical in the long run. Interest rates and lender policies can vary, and long-term loans sometimes carry slightly higher APRs. Using trusted online tools for accurate projections helps prevent financial surprises.
5. Alternatives to 97 Month Loans
- Shorter Term Loans: 60–72 month loans reduce interest while keeping monthly payments manageable.
- Leasing Options: May offer lower monthly payments without long-term depreciation risk.
- Larger Down Payment: Reduces principal, shortens term, and decreases total interest.
- Certified Pre-Owned Vehicles: Cheaper than new models and may allow shorter loan terms.
6. How to Evaluate if a 97 Month Loan is Right for You
Before agreeing to a 97 month car loan, calculate:
- Monthly payment vs. total interest
- Vehicle depreciation compared to loan balance
- Impact on insurance costs and future trade-in value
- Eligibility and credit requirements
Trusted sources like Kelley Blue Book Auto Loan Guides provide tools to compare loan options and evaluate depreciation risk.
Conclusion
A 97 month car loan can lower monthly payments and make expensive vehicles more affordable, but it carries significant risks including higher interest costs and negative equity. By using online calculators, reviewing lender terms, and considering alternatives such as shorter loans or certified pre-owned vehicles, buyers can make informed choices.
