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What is APR on a car loan?
I've been looking at some car loans and I want to make sure I understand the terminology. What is APR on a car loan? How is it different from the interest rate?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
The APR of a
car loan
stands for annual percentage rate. In most instances, the APR is what a lender advertises, as it’s a more accurate depiction of what you pay on a car loan compared to the interest rate.If you look at both the interest rate and the APR, you should notice that the APR is higher. This is because the APR factors in what you pay for taxes, fees, and any other charges rolled into the loan. An interest rate doesn’t account for any of these extra fees. It’s simply the amount of interest you’re paying on the loan.
When you find a car loan you’re happy with, keep in mind that lenders will require full coverage car insurance for a financed vehicle. Try using the number-one-rated car insurance app,
Jerry
, to help you find the best deals. Jerry compares personalized quotes from more than 50 top providers and delivers the best deals to your phone in minutes for free. The average Jerry driver saves $879 a year on car insurance!View full answer
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