How Loan Terms Affect Your Car Payments: A Simple Guide

Car Loan Calculator Shows How Loan Terms Impact Costs New Jersey-based car salesman Joseph Rodriguez recently addressed a viewer's question about car loan payments on social media. The viewer, Alex, inquired about the monthly payments for a car purchase with a credit score of 670 and a down payment of $3,000-$4,000. Rodriguez used a car loan calculator to illustrate the impact of loan terms on the total cost. "With a 72-month loan term, the monthly payment is significantly lower," Rodriguez explained. "However, the total interest paid over the life of the loan is substantially higher." The calculator showed a monthly payment of around $389.28 for the 72-month loan, but a total interest cost nearing $9,000. In contrast, a 48-month loan resulted in a higher monthly payment of $501.20, but a much lower total interest cost. Rodriguez also emphasized the importance of considering a warranty, especially for used cars. "Things do fail on these cars," he noted, suggesting that a warranty can provide crucial protection against unexpected repair costs. This video serves as a valuable reminder for consumers to carefully consider the implications of loan terms when financing a car purchase.