Dealers negotiate the payment because the payment is the number you feel. The term is where the money actually goes.
Take a $35,000 loan at 7%. Over 60 months that's about $693 a month and roughly $6,600 in total interest. Stretch it to 84 months and the payment drops to about $528. That's $165 a month back in your pocket, and it costs about $9,400 in interest instead. You paid $2,800 for the smaller payment.
But the interest is the smaller problem. A car loses value fastest in the first three years and an 84-month loan pays down slowest in exactly those years. So you spend a long stretch owing more than the car is worth. If it gets totaled in year two, your insurer pays what the car was worth that morning, not what you owe, and you're writing a check for the difference on a car you no longer have. That's what gap coverage exists to fix, and it's a reasonable buy on a long loan, though it's cheaper to just not need it.
The other cost shows up at trade-in. People roll the negative equity into the next loan, so the new car starts underwater on day one, and the cycle keeps going. I've watched folks carry a piece of a 2019 car on a 2026 loan.
At the end of the day the car costs what it costs. The term just decides how much of that goes to the lender and how long you spend underwater. Two rules keep you out of it. Pick a term you'd accept if the rate were zero, which for most households means 48 or 60 months. And run the total, not the payment: multiply the payment by the number of months and look at that number before you sign anything. If the total makes you flinch, the car is too expensive regardless of what the monthly says.
If you're already in one and the balance is the thing keeping you up, the payoff-order question is in snowball or avalanche.