Car Payments

Front

What is financing in the context of car payments?

Back

Financing refers to the process of obtaining a loan to purchase a car, where the buyer agrees to pay back the loan amount plus interest over a specified period.

Front

How much interest will Jaclyn pay on her $11,000 car loan with a monthly payment of $255 for 60 months?

Back

$4,300

Front

What effect does an increase in down payment have on monthly car payments?

Back

An increase in down payment decreases the monthly payment.

Front

Which factor has no effect on the monthly car payment?

Back

Length of buyer's driving record.

Front

If Brenda chooses 5-year financing for her car, how many monthly payments will she have?

Back

60 monthly payments.

Front

What is the principal in a car loan?

Back

The principal is the original amount of money borrowed to purchase the car.

Front

What is the interest rate in the context of car financing?

Back

The interest rate is the percentage charged on the principal amount of the loan, which determines how much extra money the borrower will pay over time.

Front

What is amortization in car loans?

Back

Amortization is the process of spreading out a loan into a series of fixed payments over time.

Front

What is a down payment?

Back

A down payment is an initial payment made when purchasing a car, which reduces the amount financed.

Front

How does the length of the loan term affect monthly payments?

Back

A longer loan term generally results in lower monthly payments but may increase the total interest paid.