Auto Loan Quiz

What is a key factor to consider when calculating how much an auto loan will cost?

• The color of the car

• The brand of the car

• Special offers and standard factors such as down payment, APR, and term

• The location of the dealership

What is a secured loan?

• A loan that does not require any collateral

• A loan where the lender can repossess the property if payments are not made

• A loan with a fixed interest rate

• A loan that is only available for home purchases

Why is it important to understand how auto loans work?

• To choose the best car color

• To avoid a horrible credit score and losing the car

• To impress the car dealer

• To get a free car wash

How can making a larger down payment save you money when purchasing a car? (Choose two correct answers)

• Your monthly payment will be higher

• Your monthly payment will be lower

• You will pay less interest over the life of the loan

• You will pay more interest over the life of the loan

A higher credit score...

• Will help you obtain a lower interest rate on an auto loan

• Will help you obtain a higher interest rate on an auto loan

• Has no impact on the interest rate on an auto loan

A longer term length will make your monthly payment lower and you will pay ______ interest when compared to a shorter term length and higher monthly payment.

• MORE

• LESS

• EQUAL

• NO

Which statement most accurately describes the difference between leasing and owning a vehicle?

• Leasing is a term used when you purchase a car for the longest term possible

• Leasing a car is making monthly payments to use a car for a fixed period of time, but then you return it without owning it

• Leasing is a term used when you take the car for an initial test drive

• Leasing a car requires a very large down payment, while purchasing a car does not

What is the first step in purchasing a new vehicle?

• Take multiple vehicles for a test drive to see what features you like best

• Create a budget and check your credit score

• Get an insurance quote for you new vehicle

• Decide which color vehicle you want most

What is one action that can decrease the total cost of a car loan?

• Increase the amount of down payment

• Extend the term of your loan

• Secure a higher APR

• Pay less than the minimum monthly bill

What is one reason someone might choose a higher monthly payment?

• To increase the total cost of the loan

• To pay off the loan faster

• To extend the loan term

• To secure a higher APR