Plain-language explainers on what car loans really cost. Every example is calculated with the same formulas as our calculators, and every page shows when it was last reviewed.
APR vs interest rate on a car loan
The interest rate and the APR on a car loan are not the same number. See how fees and compounding change the APR, with worked examples.
Is 0% car financing really free?
0% financing can cost more than taking a cash rebate and a normal loan, and some 0% deals hide the interest in fees. Worked examples show how to compare.
Flat rate vs reducing rate on a car loan
A flat interest rate looks about half the size of the real reducing-balance rate. See the conversion with worked EMI examples and a quick table.
How PCP and balloon car finance work
PCP, balloon loans and residual-value finance lower your monthly payment by leaving a large final payment. A worked example shows the real cost.
How long should a car loan be?
A longer car loan lowers the payment but raises total interest and the risk of owing more than the car is worth. Compare 36 to 84 months with real numbers.
When does refinancing a car loan pay off?
Refinancing saves money when the new rate is lower and the term does not stretch. A worked example shows the savings, the break-even point and the common trap.
How to get out of negative equity on a car loan
Owing more than your car is worth is common in the first years of a loan. Learn why it happens, what rolling it into a new loan costs, and how to get out.
How to read a car loan offer
Amount financed, APR, finance charge, total of payments, add-ons and rate markups: what each line on a car loan offer means and what to check.