You need to buy a car so you go to a car lot and the salesman asks you how much you can pay a month on a new car. This is a common practice. The salespeople talk monthly payment more than the price of the car. When you come to a car lot, with a pre-approved car loan from a bank or credit union, you can actually negotiate the cost of the car, because youre kind of paying cash Average interest rate on new cars for people with top credit scores

(781-850) is 2.47% Average interest rate for credit scores (661-780) is 3.51% Average interest rate for credit scores (601-660) is 6.07% Average interest rate for credit scores (501-600) is 9.41% Average interest rate for credit scores (300-500) is 12.53%

If you need to finance $27,000 over 4 years at 3.51% what is your monthly car payment? (A)

How much did you pay in interest? (B)

You can stretch out the length of the loan, which is what the car salesman wants you to do; you can then afford to buy a more expensive car, in his opinion! DONT DO THIS!

If you finance the $27,000 at 3.51% for 6 years, what is your payment? (C)

How much did you pay to interest? (D) .

The reality is that most people pay on average 5.5% interest for a car loan.

If you have challenging credit and pay 9.41% interest on this same car loan, $27,000 for 4 years, how much is the monthly payment? (E)

And how much did you pay to interest? (F) .

If that loan was stretched out to 6 years, how much is the monthly payment? (G)

And how much was paid to interest? (H) .