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Interest rates vary based on credit score, loan term, and vehicle type. As of 2024-2025, excellent credit (750+) typically qualifies for 4-6% on new cars, while average credit (650-699) sees 8-12%. Used cars usually have slightly higher rates than new vehicles.

New cars have lower interest rates but depreciate faster (20-30% in year one). Used cars cost less but may have higher rates and maintenance costs. Consider total ownership costs, not just purchase price, when making your decision.

A larger down payment reduces your loan amount, lowering monthly payments and total interest paid. Most experts recommend at least 20% down for new cars and 10% for used cars to avoid being "underwater" on your loan.

36-48 month terms offer the best balance of affordable payments and lower total interest. 60-72 month terms have lower payments but significantly more interest. Avoid 84+ month loans as you risk owing more than the car is worth.

Including sales tax in your loan increases total interest paid but may be necessary if you cannot pay it upfront. Sales tax varies by state (0-10%+). If possible, pay sales tax separately to reduce your loan balance.

Common fees include documentation fees ($100-500), registration ($50-500), dealer preparation ($200-1000), and title fees ($15-100). Some are negotiable. Always ask for a breakdown of all fees before signing.