When you’re looking for auto loan rates, it’s not just about APR. There are several factors you should consider when comparing auto loan quotes.

Interest Rates

Your interest rate is the percentage the lender charges you to borrow money. Your APR is your interest rate plus all loan fees. Only borrowers with excellent credit get approved for the lowest rates, so your rate will likely be higher than the starting APR a lender advertises.

While other factors affect the total cost of your loan, APR is the most important. Even one-tenth of a percentage point could make a difference of hundreds or even thousands of dollars over the course of your loan.

Loan Term

Also referred to as term length, your loan term is the amount of time you have to repay your loan. Most auto loans have term lengths of up to 72 or 84 months, but some can extend even longer.

The longer the length of the loan, the lower your monthly payments will be. However, you’ll pay more in interest over the life of your loan. Longer loan terms typically come with higher interest rates, too.

Discounts

Some lenders offer rate discounts on their loan products. One common discount is a reduction of your APR when you sign up for automatic payments from your bank account or credit card. Based on our research, providers usually offer to take 0.5% off of your APR for signing up for autopay.

Fees and Penalties

Lenders often charge fees or penalties for various things, such as missing a car payment or paying late. Some lenders charge a fee for paying your car loan off early, known as a prepayment penalty. These fees and penalties are usually tucked away in the fine print of a loan contract, so read everything carefully before signing.