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The interest rate is the cost of borrowing the principal, while the APR (annual percentage rate) includes the interest rate plus certain finance charges, expressed as a yearly rate. On many auto loans the two are close or identical, but if a lender rolls in fees, the APR will be higher. The federal Truth in Lending Act requires lenders to disclose the APR, so use it to compare offers from different lenders on an apples-to-apples basis.

Compare by APR and total cost first, then check whether the monthly payment fits your budget. A lower payment can simply mean a longer term, which usually means paying more interest overall. Ask each lender for the APR, the term in months, the amount financed and the total of payments. Those four numbers, shown on the Truth in Lending disclosure, tell you what the loan really costs.

Most auto loans run from 36 to 72 months, and many lenders also offer 84-month terms, especially on new vehicles. Some lenders limit longer terms based on the vehicle's age, mileage or loan amount. A longer term lowers the monthly payment but increases the total interest you pay and raises the chance you'll owe more than the car is worth for a longer stretch. Choose the shortest term whose payment you can comfortably afford.

It isn't automatically bad, but it carries real trade-offs. Longer terms often come with higher rates, you pay interest for more years, and the car depreciates faster than you pay it down, so you can stay upside down for a long time. That makes trading in early or handling a total loss costlier. If a long term is the only way the payment works, consider a less expensive vehicle, a larger down payment or a shorter term with extra payments.

Usually quite a bit more, because you pay interest on the balance for more months and longer terms often carry a higher rate. Stretching the same amount from 48 to 72 months can raise total interest by well over half, depending on the rate. The best way to see it is to compare the total of payments for each term side by side. On OffLot, the financing step in Build your deal shows payment examples from sample lenders so you can compare terms.

A car payment is based on three things: the amount financed, the interest rate and the number of months. The amount financed is the vehicle price plus taxes, fees and any add-ons, minus your down payment, rebates and trade-in equity. Lenders use a standard amortization formula, so early payments go mostly toward interest and later ones mostly toward principal. On OffLot, the 'What can I afford?' tool on each vehicle page works backward from a monthly budget.

The amount financed is what you actually borrow. It typically starts with the agreed vehicle price, then adds sales tax, title and registration, dealer documentation fees and any products you choose to finance, such as a service contract or GAP. Your down payment, rebates and trade-in equity are subtracted, and any negative equity from a trade is added. Review the itemization on your contract to make sure nothing was added that you didn't agree to.

There's no single right amount, but a larger down payment lowers your payment, reduces total interest and helps you avoid owing more than the car is worth. Many shoppers aim for around 20% on a new car and 10% on a used one as a rule of thumb, but any amount helps. Keep an emergency fund rather than emptying savings. On OffLot, you can change the down payment in the financing step and see the payment estimate update.

Often yes, if your credit and income are strong enough, and some promotions specifically advertise zero down. The trade-off is a higher loan balance, a higher payment, more interest and a greater chance of being upside down early in the loan, since a new car loses value quickly. If you do put nothing down, consider a shorter term and look into GAP coverage, which can cover the gap between your loan balance and the car's value after a total loss.

There's no universal minimum; lenders approve borrowers across a wide range of scores, but the score strongly affects the rate you're offered. Higher scores generally qualify for the lowest advertised rates and promotional offers, while lower scores pay more. Lenders also look at income, debts, job history and the loan-to-value of the vehicle. Check your credit reports for free at AnnualCreditReport.com before shopping so you know where you stand and can fix any errors.

Many auto lenders use FICO Auto Scores, which are industry-specific versions that weigh past auto-loan history more heavily and range from 250 to 900. Others use a base FICO or VantageScore. Lenders may also pull from different bureaus, so the score a lender sees can differ from the one in your banking app. Your general score is still a good indicator, but don't be surprised if a lender's number is a bit different.

Yes, many lenders work with lower credit scores, but expect a higher interest rate, possibly a larger required down payment and limits on the vehicle's age or price. To improve your odds, save a bigger down payment, choose a less expensive car, show steady income, consider a credible co-signer and get pre-approved before visiting a dealer. Read every term carefully, and be cautious of loans whose payments only look affordable because the term is extremely long.