Before you set foot in a showroom, know your number. Enter the vehicle price, your down payment and trade-in, the sales tax rate, and the loan terms below to see your estimated monthly payment, the total interest you’ll pay, and the all-in cost of the vehicle.
Why the monthly payment isn’t the whole story
Dealership finance offices are trained to negotiate on monthly payment, because stretching a loan from 60 to 84 months can make an expensive car “feel” affordable while adding thousands in interest. Always compare loans by total cost — the monthly payment times the number of months, plus your down payment — not by the payment alone.
Three ways to lower your real cost
Arrange financing before you shop. A pre-approval from your bank or credit union gives you a rate to beat, and turns the dealer’s financing offer into a competition instead of a take-it-or-leave-it.
Negotiate the price, not the payment. Settle the out-the-door price of the vehicle first, then discuss financing. Mixing the two lets the numbers move around on you.
Keep the term as short as you can afford. Long terms mean years of being “underwater” — owing more than the car is worth — which gets expensive if you need to sell or trade early.