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Car Loan APR
Definition
The annual percentage rate representing the total cost of borrowing for a car loan.
Explanation
APR on car loans includes the interest rate plus any fees. Since car loans typically have minimal fees, APR is usually close to the interest rate. A difference of just 2% can mean thousands of dollars in extra interest over the loan term.
Checking rates with multiple lenders (banks, credit unions, online) can save significantly.
Example
$30,000 60-month car loan: 4% APR = $552/month ($3,150 interest). 8% APR = $608/month ($6,498 interest).