 TITLE: Buying a New Car? Here’s What You Need to Know CONTENT: Monthly Payments vs. Total Cost\n-------------------------------\nIn general, dealers talk in terms of monthly payments and may encourage you to get an auto loan with a longer repayment term to make the payment more affordable. If this happens, it's important to keep an eye on how much you'll end up paying total to avoid overpaying for the car.\nAs an example, let's say you're purchasing a new car for $25,000 and qualify for a 5% interest rate if you opt for a four-year repayment term. Your monthly payment would be $576, and you'd pay a total of $2,635 in interest.\nIf you go with a six-year repayment term, however, let's say your interest rate would increase to 6%. In this scenario, your monthly payment would be more affordable at $414, but you'd pay $4,831 in interest over the life of the loan.\nTo avoid getting stuck with a more expensive loan, make sure to ask the dealer to explain the loan options in terms of total cost instead of just the monthly payment. END