Auto Loans
Car financing goes wrong in predictable places: negotiating the payment instead of the price, add-ons rolled into the loan, and terms long enough that you owe more than the car is worth. These guides walk through each one, with the math.
Start here if: You're buying a vehicle or wondering whether to refinance the loan you have.
How to Finance a Car Without Losing the Deal in the Finance Office
A step-by-step plan for car financing: what to do before the lot, what happens in the finance office, and the numbers to check before you sign.
The auto loans guides, in a sensible order
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Step by step
How to Finance a Car Without Losing the Deal in the Finance Office
A step-by-step plan for car financing: what to do before the lot, what happens in the finance office, and the numbers to check before you sign.
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Explainer
72- and 84-Month Car Loans: What the Lower Payment Costs
Long car loans make the monthly number smaller. Here is what they do to total interest, to how fast you build equity, and to your next car purchase.
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Worked example
Refinancing a Car Loan: Two Worked Examples, One Trap
Two hypothetical refinances of the same car loan: one that saves real money and one that only looks like it does. Plus the fees, penalties and equity problems to check first.
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ILoan BasicsComparison
Loan Term and Total Cost: What a Lower Monthly Payment Really Buys
The same $15,000 loan across five terms, what each extra year of payments costs, and a practical way to pick a term you can live with.
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ILoan BasicsComparison
Secured vs. Unsecured Loans: What You Pledge and What You Risk
A secured loan can mean a lower rate or an easier approval. It also means a specific thing you own is on the line. Here's how to weigh it.
Questions people ask about auto loans
Should I get preapproved before going to the dealer?
It helps. A preapproval from a bank or credit union gives you a rate to compare against the dealer’s financing, and lets you negotiate the car’s price separately from the loan. Step by step.
When does refinancing a car loan make sense?
Usually when you can get a meaningfully lower rate without stretching the term much, and the fees pay for themselves within a few months. Extending the term can lower the payment while raising the total. Check your break-even.
What does it mean to be upside down on a car loan?
It means you owe more than the car is worth. Long terms and small down payments make it more likely, and it becomes a problem if you need to sell or the car is totaled.
- Calculator
Refinance CalculatorCompare what's left on your current loan with a new rate and term: monthly change, total change, and how long fees take to pay for themselves.
- Calculator
Loan Payment CalculatorEstimate the monthly payment and total cost of a fixed-rate loan, including an origination fee and extra payments, then compare two scenarios side by side.
- Worksheet
Offer Comparison WorksheetEnter up to three real offers. The worksheet totals each one, checks the numbers against each other, and shows which costs least overall.
- Negative equity
- Owing more on a loan than the item securing it is worth, such as a car loan balance higher than the car's value. Also called being upside down.
- Loan-to-value ratio (LTV)
- The loan balance divided by the value of the collateral, as a percentage. Lenders use it to set terms on car loans, refinances and home equity borrowing.
- Refinancing
- Replacing an existing loan with a new one, usually to get a lower rate, a different term, or a different payment. Fees and a longer term can cancel out the savings.
- Break-even point
- How long it takes for the monthly savings from refinancing to add up to the fees you paid to refinance. After that point, the new loan is ahead.
- Collateral
- Property you pledge to secure a loan, which the lender can take if you default. Common examples are a vehicle title, a savings account or certificate, and home equity.
- Loan term
- How long you have to repay a loan, usually stated in months. A longer term lowers each payment and usually raises the total interest you pay.
- CFPB: Auto loans
Shopping for a car loan, understanding dealer financing, and what to do if you have trouble paying.
- FTC: Financing or leasing a car
How dealer financing works, add-ons, and your rights.
- NHTSA: Check for recalls
Look up open safety recalls by vehicle identification number before you buy.