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What is my APR on a car loan?
I’m shopping around for a car loan for the first time. I keep seeing APR and interest rates thrown around on advertisements and when I search for loans. I know what an interest rate is, but what is the APR on a car loan?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
If you want to know the APR on your car loan, just think of it as the total amount of charges you pay to finance the vehicle. Also known as the annual percentage rate, the APR includes interest plus taxes, fees, and other charges.
Because the APR includes these extra charges, it’s always a bit higher than the actual interest rate. But if you want to determine how much you will pay on the principal, use the APR instead of the interest rate. Thankfully, most lenders quote rates in APR, so this should make understanding what you’re paying a bit easier.
If you’re searching for ways to lower your APR, apply one or more of these tricks or tips:
- Shop around to find the best rate
- Make a largerdownpayment
- Pay any fees, taxes, or charges out of pocket instead of rolling them into the loan
- Pick a shorter loan term
But your APR or monthly payments are not the only two things you should budget for. Your lender will also require full coverage auto insurance for the entirety of the loan. This can get expensive, so make sure to search rates with the
Jerry
app to get the best price on the coverage you need.As a licensed broker, Jerry helps you find and compare quotes from over 50 top providers in minutes. When you find a great rate, Jerry can help you buy your new coverage and cancel or switch your old policy if necessary. Customers save an average of $879 per year!
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- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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