Four factors that will determine your monthly payments
- Amount of the loan - The car's purchase price and the financing charges for your loan will determine the amount of the loan. The smaller your loan amount the lower your monthly payments will be.
- Down Payment - The money you pay up front toward the purchase price of a vehicle is your down payment. Often the value of your trade-in vehicle can be used as a down payment. The down payment can be cash or trade-in allowance, or both, and usually represents the difference between the loan and the purchase price.
- Interest rate - Almost all auto loans carry fixed interest rates. The fixed interest rate is set in advance and remains the same throughout the loan. As a result, the monthly installment payments are the same each month. Lowering your fixed interest rate can yield lower monthly payments.
- Length of the loan - Typical auto loan lengths have terms of 2, 3 or 4 years. In recent years some lenders have been offering longer terms in order to minimize monthly payments. Many lenders in State now offer 60-month (5 year) financing programs.