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Often, youll review the contract with the finance manager, not your salesperson.
Thats the time to bring up any discrepancies between what the dealer offered and the terms.
Interest Rate
The interest rate or APR is how much youll pay in interest.
Loan Term
The loan term represents the length of the loan, typically reflected in months.
This leads to lower monthly payments, but a higher total cost.
Monthly Payment
The monthly payment is just that how much you have to pay each month.
Down Payment
Thedown paymentis how much you paid upfront to reduce the total loan balance.
Some of these costs can befinancedor paid upfront, while some can be avoided completely.
Be aware of any late charges you might incur.
Setting up automatic payments can help avoid late fees.
GAP Insurance Costs
GAP stands for guaranteed asset protection.
New cars depreciate by 20% within the first year, which can leave you underwater on the loan.
If you choose to invest in a warranty or maintenance plan, initiate the numbers.
And dont let the dealer sneak that added charge into your contract without your knowing.
This guide can help you know what to look for.
Dont sign until you feel comfortable with every aspect of the contract, no matter what that takes.
see to it that the price reflects any dealer incentives or the trade-in value of your prior vehicle.
Are there any charges you might want to pay upfront to reduce your overall loan?
Is there a prepayment penalty?
ensure everything is as agreed.
Shop Around for an Auto Loan
Compare loan offers.
The dealership may not always provide the best rates or terms.
If youre a member of a credit union, they might offer better interest rates and terms.
it’s possible for you to also check with banks, especially if youre a loyal customer.
Read the Contract in Full
Dont sign without understanding all the terms.
Dont hesitate to ask if something seems off or not what you agreed to with your salesperson.
Negotiate Unfavorable Terms
If the rates arent what you expected, you should negotiate.
If you dont have excellent credit, you may secure a better interest rate with a co-signer.
you could also ask the finance manager or lender to reduce or remove fees.
Check for Early Payoff Restrictions
ensure theres no penalty for paying the loan off early.
If not, double-check that the purchase price of the vehicle is what you agreed to when you negotiated.
But its important to read the auto loan contract carefully and understand exactly what youre getting into.
If something seems off, ask questions and negotiate.
An auto loan is a mid-term agreement that can last three to 10 years.
You want to ensure it benefits you as much as the lender.
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