Auto Loan Total Cost: Beyond the Monthly Payment

Vehicle price, taxes, add-ons, down payment, APR, and term all determine cost. A low monthly payment can hide a long expensive loan.

Negotiate the pieces

Keep vehicle price, trade-in value, financing, and add-ons separate. Combining them makes cost harder to see.

Read the truth-in-lending box

Review APR, finance charge, amount financed, total of payments, payment schedule, and late terms before signing.

Long terms cost more

A longer term can reduce the monthly payment while increasing interest and the period when the vehicle may be worth less than the balance.

Check add-ons

Service contracts, GAP products, theft products, and dealer extras are often optional. Ask the price and cancellation terms for each.