Question 1

What is a good interest rate for a car loan?

Accepted Answer

Car loan interest rates depend on your credit score, the loan term, and whether the car is new or used. Typically, a higher credit score will get you a lower interest rate. It's wise to get pre-approved from your bank before visiting a dealership.

Question 2

Should I make a down payment on a car loan?

Accepted Answer

Yes, making a down payment is highly recommended. It reduces your loan amount, lowers your monthly payments, and helps you build equity in the vehicle faster, reducing the risk of being 'upside down' on your loan (owing more than the car is worth).

Question 3

How does the loan term affect my car payment?

Accepted Answer

A longer loan term (e.g., 72 or 84 months) will result in a lower monthly payment, but you will pay significantly more in total interest over the life of the loan. A shorter term saves you money in the long run.

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