Calculate your auto loan monthly payment, total interest, and total cost including down payment and trade-in value.
A larger down payment reduces your loan amount, monthly payment, and total interest paid. However, it also reduces your liquid savings. Consider your overall financial situation and emergency fund when deciding.
Shorter terms (36-48 months) have higher payments but less total interest. Longer terms (60-84 months) have lower payments but cost more in interest. Choose based on your budget and how long you plan to keep the vehicle.
Trade-in value reduces your loan amount similarly to a down payment. It's applied to the purchase price before calculating the loan. A higher trade-in value means a smaller loan and lower payments.
Interest rates vary based on credit score, loan term, and lender. As of 2025, rates for good credit (700+) typically range from 3-6% for new cars and 4-7% for used cars. Shop around and compare offers from multiple lenders.
Getting pre-approved before shopping can help you know your budget and negotiate better. It also simplifies the dealership process. Compare pre-approval offers from banks, credit unions, and online lenders for the best rates.