LotLitmus / U.S. buyer guide

Read the loan behind the monthly payment.

A worksheet can show a payment without making the full cost of borrowing easy to see. Use the written loan figures to compare offers, then check whether products on the worksheet are included in the amount borrowed.

01 / Read the figures

Four numbers that explain the loan

APR
The annual cost of borrowing expressed as a percentage. It includes the interest rate and certain loan fees, so compare APR with APR.
Amount financed
The amount borrowed. Check what has been added to it, including any product or service financed with the loan.
Finance charge
The total interest and certain fees over the loan if each payment is made as scheduled.
Total of payments
The sum of the scheduled loan payments by the end of the term.

The CFPB describes these figures as part of the information buyers should review in loan paperwork before signing.[2][3]

02 / Compare offers

Compare the loan, not just the payment

Dealer-arranged financing is an indirect loan: the dealer forwards an application to prospective lenders. The CFPB explains that a dealer’s offered rate may include additional interest that compensates the dealer for arranging financing. Ask which lender is making the offer and whether the dealer received other lender offers.[1]

An outside preapproval gives you another written offer to compare. Put the APR, loan length, amount financed, payment count, and total of payments side by side. Keep the vehicle price, cash down, trade-in credit, and add-on choices consistent when comparing the financing.[1][4][2]

A smaller monthly payment can come with a longer repayment period. Compare the finance charge and total of payments as well as the monthly amount; the CFPB notes that longer loans can mean more interest over time.[4][2]

  • Ask for the lender name, APR, term, amount financed, number of payments, and total of payments for each offer.
  • Ask whether the dealer checked more than one lender and whether another offer had a lower APR or different terms.
  • If one payment is lower, check whether the loan term is longer before treating it as the less costly offer.

Browser-only estimate

Compare two financing offers

Enter the amount financed, APR, and term from each written offer. Keep the vehicle price, down payment, trade-in, and add-ons consistent for a useful comparison.

Dealer offer

Outside preapproval

Complete all six fields with valid values to see the side-by-side estimates.

Complete all six fields to print.

Estimates only, not lender quotes or financial advice. Payment is calculated from the loan amount, APR, and term, with monthly payments rounded to cents. Your entries are saved only in this browser and are never sent to or saved on our servers.

03 / Follow add-ons

Trace each financed add-on into the loan

Products such as GAP coverage or a service contract can be listed with the vehicle deal. If a product is financed with the car, its price becomes part of the amount borrowed and interest can add to what is repaid. The CFPB describes these products as optional in its general guidance; confirm the terms for the specific product and transaction in writing.[4][5]

To see the effect, ask for the written financing figures with the product included and with it removed. Compare the change in amount financed, payment, finance charge, and total of payments. The product’s coverage, eligibility, cancellation, and refund details can depend on its contract and applicable state rules.[2][5]

  • Identify the product and its separate price on the worksheet or product contract.
  • Check whether the quoted amount is paid separately or added to the loan balance.
  • Read the product terms for coverage limits and any cancellation or refund process before deciding.

Browser-only estimate

Estimate an add-on's financing cost

Enter the add-on price, APR, and loan term to estimate what it costs when the full price is included in the loan.

Enter an add-on price, APR, and loan term to see the estimate.

This is arithmetic based on the values you enter, assumes the full add-on price is financed at a fixed APR over the selected term, and is not financial advice. The monthly payment is rounded to cents; at 0% APR, any final-cent adjustment leaves total repayment equal to the add-on price. Your entries stay in this browser and are not saved or sent.

Questions to consider

Before you sign

Educational prompts for U.S. car buyers reviewing a deal. This checklist is not legal or financial advice.

  • Do I have the complete out-the-door price in writing, with the charges, fees, and any included add-ons shown?[4]
  • Have I compared this financing offer with another offer using the APR, loan term, amount financed, and total of payments?[1][4][2]
  • Have I reviewed each optional add-on and its total cost, including interest if it is financed?[2][5]
  • Have I asked for an explanation of every figure I do not understand before signing?[2]

Before signing, compare the final loan disclosures and product paperwork with the latest worksheet. Ask the dealer or lender to explain any difference and request time to review the written terms.

Sources

  1. [1]What is the difference between dealer-arranged and bank financing? — Consumer Financial Protection Bureau
  2. [2]What should I know before I finalize a car or auto loan? — Consumer Financial Protection Bureau
  3. [3]What is the difference between a loan interest rate and the APR? — Consumer Financial Protection Bureau
  4. [4]What things can I negotiate when shopping for a car or auto loan? — Consumer Financial Protection Bureau
  5. [5]What is Guaranteed Asset Protection (GAP) insurance? — Consumer Financial Protection Bureau