EDPUZZLE: All About Car Loans  

A car, just like a mortgage, is a secured loan. That means if you fail to make payments, the lender can repossess the property, leaving you with a horrible credit score — and no car! For that reason, it’s especially important that you understand how auto loans work. Watch this video and answer the questions on your worksheet.

INTERACTIVE: Auto Loan Calculator

Auto loans are amortized installment loans, so once the terms of your loan are set, your payments should stay the same month after month. Assume you are taking a $20,000 car loan, for a term of 48 months, with an interest rate of 4%. Use this calculator to answer the following questions.

LEARNING TARGETS:

• I can calculate how much an auto loan will cost given special offers as well as standard factors such as down payment, APR, and term.
• I can compare auto loan offers and decide how they fit within your budget.