How Do You Figure Out the Finance APR Rate When Buying a Car?
- 1). Carefully read your loan agreement to make sure you know the nominal APR, the monthly payments, the principal on the loan and whether interest compounds monthly or annually.
- 2). Enter the nominal APR into a financial calculator (see References). If your loan compounds monthly, use 12 for the number of compounding periods.
- 3). Estimate what you should be paying based on your area and the type of car loan you're seeking. Online resources such as Bankrate (see References) can show you nominal APRs being offered around the country as reported by banks.