Estimate your monthly auto loan payments, total interest, and explore financing options to make an informed decision.
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Get a loan pre-approval from your bank or a credit union before visiting the dealership. This gives you a baseline interest rate and strengthens your negotiating position.
Your credit score is a major factor in the interest rate you'll be offered. Check your score beforehand and take steps to improve it if necessary.
A shorter loan term (e.g., 3-5 years) means higher monthly payments but significantly less interest paid over the life of the loan. Avoid 7-year loans if possible.
Always finalize the price of the car before discussing financing, trade-ins, or down payments. This prevents the dealer from manipulating numbers in other areas.
Be cautious of extras pushed by the finance manager, like extended warranties, GAP insurance, or paint protection. Research if you truly need them and if the price is fair.
A larger down payment reduces your loan amount, which lowers your monthly payments and the total interest you'll pay. Aim for at least 20% of the vehicle's price.
The total cost of borrowing money, including the interest rate and any fees, expressed as a yearly percentage.
The initial amount of money borrowed to purchase the car, after the down payment and trade-in value are subtracted.
The length of time you have to repay the loan, typically expressed in months or years.
The initial cash payment you make towards the purchase price of the vehicle.
The process of paying off a loan over time with regular payments. An amortization schedule shows how much of each payment goes towards principal vs. interest.
When you owe more on your car loan than the vehicle is actually worth. This is common in the first few years of a loan.