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Car loan payments use the standard amortisation formula: PMT = P x [r(1+r)^n] / [(1+r)^n - 1], where P is the financed amount (price minus down payment and trade-in), r is the monthly interest rate (APR / 12), and n is the loan term in months.

In 2026, US car loan APRs range from about 5 to 7% for borrowers with excellent credit (720+ score) to 15% or more for poor credit. The Federal Reserve reports average new car loan rates of around 7 to 8% and used car rates of 11 to 12%. Rates vary by lender, term length, and vehicle age.

A longer term reduces monthly payments but significantly increases total interest paid. Cars depreciate quickly, so long-term loans risk you owing more than the car is worth (negative equity). Most experts recommend keeping car loans to 48 to 60 months maximum for new vehicles.

Your trade-in value is applied as a credit against the purchase price, reducing the amount you need to finance. Buying a 0,000 car with a ,000 trade-in and ,000 down means you finance only 2,000. Always compare trade-in offers from multiple sources, as dealers sometimes undervalue trade-ins.

Guaranteed Asset Protection (GAP) insurance covers the difference between what you owe on the loan and what the car is worth if it is totalled or stolen. It is most useful in the first 1 to 2 years of a long loan term when you are most likely to owe more than the car is worth.

Car loan payments use the standard amortisation formula: PMT = P x [r(1+r)^n] / [(1+r)^n - 1], where P is the financed amount, r is the monthly interest rate (APR / 12), and n is the loan term in months. This applies to Hire Purchase (HP) and personal loans, though PCP works differently.

In 2026, UK car finance APRs typically range from 6 to 9% for good-credit borrowers on Hire Purchase. PCP deals often advertise low representative APRs as promotional rates, but you must factor in the final balloon payment. Personal loan rates from banks typically range from 6 to 10% for car purchases.

Hire Purchase (HP) spreads the full cost over a fixed term after which you own the car outright. Personal Contract Purchase (PCP) has lower monthly payments but includes a large optional balloon payment at the end. With PCP you can return the car, pay the balloon to own it, or use any positive equity as a deposit on a new deal.

A longer term reduces monthly payments but significantly increases total interest paid. Cars depreciate quickly, so long-term loans risk negative equity (owing more than the car is worth). Most financial advisers recommend keeping HP agreements to 48 to 60 months maximum for new vehicles.

Your part-exchange value is deducted from the purchase price, reducing the amount you finance. Dealers offer a part-exchange valuation at point of sale, but you can also sell privately for more. Websites like We Buy Any Car provide instant valuations to compare against the dealer offer.

Car loan payments use the standard amortisation formula: PMT = P x [r(1+r)^n] / [(1+r)^n - 1], where P is the financed amount (price minus down payment and trade-in), r is the monthly interest rate (APR / 12), and n is the loan term in months.

In 2026, Australian car loan rates typically range from 6 to 9% per annum for secured new car loans from banks and credit unions, to 10 to 15% for unsecured personal loans used for car purchase. The comparison rate (which includes fees) is the most useful figure to compare across lenders.

A secured car loan uses the vehicle as collateral, resulting in lower interest rates but requiring the lender to have a financial interest in the car. An unsecured personal loan has higher rates but gives you more flexibility, including buying from a private seller. Most dealers offer secured finance only.

A longer term reduces monthly payments but significantly increases total interest paid. Cars depreciate quickly, so long-term loans risk negative equity. Most advisers recommend keeping car loans to 48 to 60 months for new vehicles and 36 to 48 months for used vehicles.

A comparison rate includes both the interest rate and most fees and charges, giving a truer picture of the total cost. By law, lenders must display the comparison rate alongside the advertised rate. A loan with a low headline rate and high fees may have a higher comparison rate than a loan with a higher headline rate.

Car loan payments use the standard amortisation formula: PMT = P x [r(1+r)^n] / [(1+r)^n - 1], where P is the financed amount (price minus down payment and trade-in), r is the monthly interest rate (APR / 12), and n is the loan term in months.

In 2026, Canadian new car loan rates through dealerships or banks typically range from 5 to 8% for borrowers with good credit. Used vehicle rates are generally 1 to 3% higher. Dealer promotional rates (often 0% or very low) require excellent credit and are only available on specific models.

A longer term reduces monthly payments but significantly increases total interest paid. Canadian auto loans can run up to 84 months (7 years), but longer terms risk negative equity as the car depreciates faster than the balance reduces. Most advisers recommend 48 to 60 months for new vehicles.

Your trade-in value is deducted from the purchase price, reducing the amount you need to finance. In Canada, trading in a vehicle at a dealership also reduces the taxable amount for GST/HST/PST purposes, which can save several hundred dollars in sales tax compared to a private sale.

Both options have merits. Dealer financing can offer promotional rates (0% or very low) but may have less flexibility. Bank or credit union financing gives you pre-approval so you know your budget before shopping, which can improve your negotiating position. Always compare the total cost of both options.