What Factors Affect My Car Payments?

toy car on calendar with payment date circled

With purchasing a vehicle being a major investment for most people, getting approved for auto financing is typically a central component of the car buying process.

Since there are numerous factors that go into determining your car loan or financing amount, it’s important to understand what’s involved and how this impacts your monthly car payment, so you can make an informed decision.

Keeping this in mind, here are some key factors that affect your monthly car payments:

  1. Credit score
    Your credit score is a numerical value reflecting your credit history that auto lenders and other finance companies reference when determining how much money they may be willing to lend and under what conditions (i.e. term length, interest rate, etc.). Generally, the higher your credit score, the more likely you are to qualify for lower interest rates, which can result in lower monthly payments.

  2. Down payment amount
    The amount of money you put down on a car can have a direct effect on your car payment amount. Generally, the larger your down payment, the less you will have to pay on your car over time.

  3. Length of car loan or financing term
    Car loan and financing terms typically range from three to seven years, and lengthier terms usually come with higher interest rates. The financed amount is divided up into monthly installments to be paid back over a certain period. This, along with the interest rate, will determine your car payment amount. To get a better idea of how this works, you can try our car payment calculator.

Finding the right car financing or loan

The auto lender or finance company plays a key role in your car loan or financing terms, and your overall car buying experience. If you’re in the market to purchase a vehicle, a car dealer enrolled in the Credit Acceptance auto finance program can get you approved for financing, whether you have bad credit or no credit. Simply see if you pre-qualify on our website and we’ll connect you with a car dealership in your area that can help you get started.

Start your auto financing pre-qualification today!