The Express Lane Blog

3 Factors that Can Influence Your Monthly Car Payment

tiny car next to pile of money and calculator

It goes without saying that buying a car is a major purchase — one that involves a lot of research, time and, of course, money. If you’re a first-time car buyer or someone with bad credit who is looking to get a car loan or vehicle financing, it’s important for you to understand the factors that may influence your monthly car payment.

First, let’s go over the basics of auto financing (or car loans).

Generally, when you get approved for financing or a car loan, the lender approves you for a certain amount of money to pay back over an agreed-upon period of time. Your car payments are typically broken down into monthly installments, which are largely determined by the following factors.

  1. Your credit history

    Your credit history determines your credit score, which is a number that lenders (such as banks, finance companies) typically reference to establish how much money they are willing to lend you as well as determine the corresponding interest rate, both of which impact the amount of your monthly car payment.

  2. Your down payment amount

    Generally, the larger your down payment, the lower the overall loan amount, monthly car payment and, potentially, total interest paid.

  3. The length of your auto financing or car loan

    The length or term of your auto financing or car loan term combined with your annual percentage rate (APR) will determine your monthly car payment. As a result, the longer the term of your financing or loan, the lower your monthly car payment.

Credit Acceptance is an indirect subprime finance company with more than 12,000 enrolled car dealers across the nation who can say “yes” to every customer, regardless of their credit history. If you’re a car buyer with bad credit or no credit who is currently in the market to purchase a vehicle, simply fill out this short form on our website to get connected with an enrolled car dealer who can help you start your credit approval today!