Short term car loans, as opposed to long-term loans, require the debtor to pay a larger amount of money each month, but less money overall. Short term auto loans (one-three years) are highly recommended for used cars, which depreciate in value much faster than new cars. The value of a new car will also depreciate, but at a much slower rate. Auto loans for new cars are more flexible, but it is still recommended to opt for the short-term loan so that you're not locked into a long-term payment plan for a purchase that's depreciating in value.