How are car payments structured?

Here’s the simple explanation: a lender gives you a fixed sum of money now in exchange for a guarantee that you will repay that amount with interest over a given period of time. Common car loan agreements span 4 or 5 years, but dealerships have flexibility to offer both short-term loans as well as longer term loans up to 72 or 84 months.

Many major lending institutions offer dealer plan finance programs that give the dealership the opportunity to offer rates that even the best qualified customers might not be able to get through the same institution at their own branch.