Let's assume you purchased a new car and financed it through the dealer.The purchase price was $30,000 including all fees, taxes and delivery costs.

The dealer offered an 'all inclusive' financing plan at a 12% rate.Your 30 monthly payments were $1,300, derived by adding interest of $9,000 to the $30,000 and dividing by 30 monthly payments.

Your friends tell you that your interest rate is above 20% and that you should have borrowed from your home equity line at a lower rate.