EEEEeeeeek! Auto L – eeeeeek! It is hard to say….auto loans (phew) without incurring fear and wildly pitchy screeching sounds, even among men. The mere sound of those two words drip with difficulty and horribleness when all you really want to do is watch Seinfeld, while someone just shows up with some car keys…preferably for a Porsche. No worries though. Borrowing is not nearly as difficult as it sounds, but it is as much work as it sounds.

How it Works
Getting a loan to buy a car is one way to finance your vehicle. On that money you borrowed to pay for a car, you pay interest, which is a percentage of the remaining balance you owe, added onto the money you already owed. This means you have to pay it back. Done. Welcome to the world of auto financing.

But how do you pay it back, you ask? Fine question, my good fellow! You pay back the money from your loan in car payments. These car payments are the full amount you borrow chopped up into in to monthly payments. The longer you take to pay off your loans, the more interest you will pay. When they calculate your monthly payment, they take interest and principle payments into account.

Also consider that you can lay down a hefty down payment, which is cash you pay upfront to knock off some of the money you have to borrow because…you just paid it. So, say you are looking at a car for $8,000. If you saved up some cashola, you could make a down payment of $4,000, and just take a loan out on the remaining $4,000. That can decrease your overall amount of interest by taking a huge chunk out of the price you need to borrow.

Also, you can obviously buy a car outright if you have the money, but we’re talking about financing here, so skedaddle!