Focus on the total
Longer loans usually mean smaller payments and more interest. The U.S. Federal Trade Commission advises focusing on the total cost, not just the monthly payment, in its guide to financing or leasing a car.
Run the numbers
Open the Auto loan calculator. Enter the vehicle price, your down payment and any trade-in, your sales tax rate, the interest rate and the term. You will see the monthly payment, the amount financed, total interest and the total cost of the vehicle. Change the term and compare.
Get quotes before you shop
The FTC suggests checking financing offers from banks, credit unions and other lenders before you visit the dealer, and getting the full price, including taxes and fees, in writing. Then you can compare the dealer’s offer with something concrete.
Check it against your budget
Use the Monthly budget planner to see whether the payment fits alongside insurance, fuel and maintenance. Compare two offers with Loan comparison.
Put it into practice.
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