Congratulations on saving up enough to make a great down payment on your vehicle! Understanding car loan
terms can seem overwhelming, but it’s easier than you might think. To answer your question, the principal on a car loan is the total amount that you’re borrowing
, including taxes, fees, and the price of the vehicle.
All of these combine to become the principal. For example, let’s say you received an invoice for the following:
Your principal is $25,175, or $22,500 + $575 + $2,100. Your monthly car note would then reflect this with interest added in. By the time you reach your final payment, you’ve paid off the entire principal and you own the car outright.
Since this is the first time you’ve financed a car, you also need to budget for maintenance, gas, and car insurance. While you can conduct routine maintenance
on your car and limit your gas usage, only shopping around will cut your car insurance bill.
That’s when the Jerry app can help you save money. As a licensed broker, Jerry
can help you find and compare quotes from over 50 top providers in minutes
. When you find a better rate, Jerry can help you buy your new coverage and even cancel your old policy!