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MoneyAtlas
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Bankrate
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How Auto Loans Work
An auto loan is secured by the vehicle itself—miss payments and the lender can repossess the car. Rates and maximum loan amounts hinge on your credit score, down payment, and the age/mileage of the vehicle. Payments are fixed-installment, so the same blend of principal and interest is due each month until the note is paid off.
Repayment Timeline
Mainstream lenders and credit unions usually offer 24- to 84-month terms. Shorter timelines save on total interest but push monthly payments higher; longer terms lower the monthly bill yet boost overall cost.
Typical Uses
- New-car purchase – finance a dealer or factory-ordered vehicle.
- Used-car purchase – fund private-party or certified-pre-owned buys.
- Refinance – swap an existing loan for a lower rate or shorter term.
- Lease buyout – secure ownership when the lease ends.
Fine-Print Fees & Add-Ons to Watch
Smart Shopping Tips
- Pre-qualify with at least three lenders—credit union, online marketplace, and dealer captive—to preview rates without a hard pull.
- Compare “all-in” APR. Factor taxes, fees, and mandatory GAP or warranty bundles the dealer may roll into financing.
- Keep term ≤ loan life. Don’t stretch payments beyond the car’s useful life or warranty period.
- Mind the LTV. A bigger down payment (or strong trade-in) lowers the loan-to-value ratio and rate.
- Skip dealership pressure. Secure a credit-union or bank approval first, then let the dealer try to beat it.
FAQs
Disclosure
Loan offers provided to customers who originated via a paid Google advertisement feature rate quotes on MoneyAtlas of no greater than 35.99% APR with terms from 61 days to 180 months. Your actual rate depends upon credit score, loan amount, loan term, and credit usage and history and will be agreed upon between you and the lender. An example of the total amount paid on a loan of $10,000 for a term of 36 months at a rate of 10% would be equivalent to $11,616.12 over the 36-month life of the loan.