I've figured out how much I can afford and reviewed my credit report. I've heard about a lot of different auto loan offers but some have lower monthly payments and some are for a longer amount of time. How can I compare?
Don’t focus only on the monthly payments you are offered – focus on the APR and the interest rate. If you don’t get the best deal available to you on the interest rate, you could end up paying significant additional interest payments over the life of the loan.
The length of the loan term is also important in considering the overall cost of the loan. A longer loan term may mean smaller monthly payments, but consider carefully whether you want to lengthen the loan term just to get your monthly payments down. Making your loan term longer may not be worth the extra costs and you could be left with a car that’s worth less than what you owe.
It is also important to think about the total cost of ownership for your car. Consider the costs that are higher for a new car than for an older one (such as taxes and insurance) and other costs resulting from the purchase (such as registration fees).
