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You are buying a car

The monthly payment is the number a dealer talks about, and the total cost is the number that matters. Price the loan term, the insurance and the running costs before you pick a car.

First 3 things this week

About 30 seconds to read. Ticks stay on this device.

0 of 3 done

How it works

  1. Price the whole month

    The payment is one line. Add insurance, fuel or charging, maintenance, registration and parking. The car total cost lab adds these up for the cars you are comparing.

  2. Watch the loan term

    A longer loan lowers the monthly payment, but you pay more interest over its life. The CFPB also says longer loans are more likely to leave you owing more than the car is worth, which is called negative equity.

  3. Compare loan offers

    Compare the annual percentage rate (APR), the term, the fees and any penalty for paying early. The CFPB suggests looking at the total cost of the loan, not only the monthly payment. A rate offered by a bank or credit union gives you a number to compare with the dealer's.

  4. Get insurance quotes first

    Insurance prices vary by car, age, ZIP code and driving record. Ask for a quote on the exact make, model and year before you sign, and compare the deductible, not only the premium.

  5. Ask for the out-the-door price

    The out-the-door price includes taxes, fees and add-ons. Ask for it in writing, and ask which add-ons are optional.

A worked example

Sample, not your numbers

One loan at four terms

Sample numbers: a $30,000 loan at a 7% APR. Your rate depends on your credit, the car and the lender.

48 months
$718.39 a month, $4,483 in interest
60 months
$594.04 a month, $5,642 in interest
72 months
$511.47 a month, $6,826 in interest
84 months
$452.78 a month, $8,034 in interest

From 48 to 84 months the payment falls by $266 a month, and total interest rises by $3,551.

What to ask HR, your lender or a tax pro

Your lender

  • What is the APR, the term and every fee, and is there a penalty for paying early?
  • Does the rate change if I add or skip any add-ons?

The dealer

  • What is the out-the-door price in writing, with taxes, fees and add-ons listed?
  • Which add-ons are optional, and what does each cost?

An insurance agent

  • What is the premium and deductible for this exact car, and what changes if I raise the deductible?

Run your own numbers

Chapter 6: credit & debt management covers credit scores, interest and how debt costs add up. Chapters 4 to 18 are Pro.

Sources

Figures read from these pages on October 6, 2026. Rates, taxes and fees depend on your credit, state and lender. The example uses one sample rate and leaves out taxes, fees and a down payment.

Education, not financial, tax or legal advice. The example uses sample numbers, and your own situation will differ.