Auto Loan Finance

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What is the first step you should take to obtain a car loan?

a. determine how much you can afford to finance
b. determine total car costs
c. save for a down-payment
d. review your credit report

What is the maximum amount of net income that you should spend towards financing a car?

a. 10 percent of net income
b. 15 percent of net income
c. 20 percent of net income
d. 25 percent of net income

In making a down-payment on a car, how much should you put down toward a purchase?

a. 5 to 10 percent
b. 10 to 20 percent
c. 20 to 25 percent
d. none of the above

In purchasing a used car, it is recommended that you do not finance more than how many months?

a. 22 months
b. 32 months
c. 36 months
d. 60 months

To negotiate with dealers about prices, it is recommended that you obtain:

a. pre-approved loan from your credit union
b. review your credit report
c. evaluate your budget
d. obtain your credit score

Which of the following finance options is often the most expensive?

a. dealer manufacturer
b. credit union
c. home equity loan
d. co-signer

Which of the following factors will most determine an auto loan interest rate?

a. credit score
b. income
c. co-signer
d. purchase price

In reviewing a sales contract, you should monitor which of the following expenses:

a. warranties
b. insurance
c. dealer add-ons
d. all of the above

How much does a new car depreciate within the first year of purchase?

a. more than 5 percent
b. more than 10 percent
c. more than 15 percent
d. more than 20 percent

Which of the following mistakes are common when purchasing a car?

a. buying the wrong car
b. choosing a dealer by location
c. impulse buying
d. all of the above