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The shortest you can comfortably afford. A widely used rule of thumb is to finance for no more than 60 months, put at least 20% down, and keep the total car payment under 10% of gross income.

84-month loans exist and are best avoided. Seven years is longer than many people keep a car, which means selling while still owing money on it.

Owing more than the car is worth, also called negative equity. It happens because cars depreciate fastest in the first year or two while the loan balance falls slowly.

It matters when you want to sell or trade in, because you have to cover the gap in cash. Rolling it into the next loan is the common alternative, and it starts the whole problem one level deeper.

Get a pre-approval from your bank or credit union first, then let the dealer try to beat it. Sometimes they can, particularly with a manufacturer promotional rate.

The pre-approval also changes the conversation. With a rate already in hand you negotiate the price of the car, not the size of the payment.

Not necessarily, because it is usually offered instead of a cash rebate rather than alongside it.

Compare properly: total cost with 0% and no rebate, against total cost with the rebate at your own bank's rate. On a large rebate the second option often wins.

Yes, in three ways at once. It lowers the payment, reduces total interest, and gets you out of negative equity sooner.

20% is the usual guidance for a new car, largely because it roughly offsets the first year of depreciation. On a used car, less is needed since the steepest depreciation has already happened.

Almost always, and most US car loans use simple interest with no prepayment penalty, so paying early genuinely saves interest.

Check for a prepayment clause before assuming it. If the loan uses precomputed interest, which is uncommon but not extinct, paying early saves much less than you would expect.

It is usually the single biggest factor within your control. Scores run 300 to 850, and lenders price in bands, so crossing a boundary can move your rate more than the points suggest.

The score is built mostly from paying on time and how much of your available credit you are using, then length of history, recent applications and credit mix.

Before applying for anything large, check your reports from all three national bureaus. Errors are common, disputing them is free, and a corrected report is the cheapest rate reduction there is.

Because the collateral is worth less and is harder to value. A used car depreciates less predictably, and if the lender has to repossess it, the recovery is lower.

Manufacturer incentives also only apply to new cars. A 0% or 1.9% promotional rate comes from the carmaker's own finance arm subsidising the sale, and no used-car lender has that reason to.

A fixed rate never changes, so the payment is predictable for the whole term. A variable rate is an index plus a fixed margin, so it moves when the index does. Most US variable lending now references SOFR or the prime rate.

Fixed costs slightly more at the start and removes the risk. Variable starts cheaper and gives you the risk.

The test worth applying: could you still afford the payment if the rate rose two or three points? If not, the cheaper variable rate is not actually cheaper, it is a bet.

Yes. The car itself is the collateral, and the lender holds the title until the loan is repaid. That is why car loans are considerably cheaper than personal loans or credit cards.

It also means the lender can repossess the car if you fall behind, in some states without going to court first. Contact the lender before missing a payment rather than after.

Not for personal use. Interest on a car you drive personally is consumer interest and is not deductible.

If the vehicle is used for business, a proportional share of the interest can be deductible against business income. That is a genuinely different situation and worth checking with an accountant.