What Does APR Mean on a Car Loan?

APR, or annual percentage rate, is the yearly cost of a car loan expressed as a percentage. It includes the interest rate plus certain finance charges built into the loan, which is why a loan offer’s APR can be a little higher than the interest rate alone. At First Team Hampton Chevrolet in Hampton, Virginia, every financing offer includes its APR in writing so you can compare it with any other lender.

Federal law requires lenders to disclose the APR before you sign, so it is the single best number for comparing one car loan with another.

APR vs. Interest Rate

  • Interest rate: The percentage the lender charges to borrow the money.
  • APR: The interest rate plus certain fees and finance charges, spread across a year. Two loans with the same interest rate can have different APRs if their fees differ.
  • What to compare: Compare APR to APR and term to term. A lower payment on a longer loan can cost more in total.

What Affects the APR You Are Offered

  • Credit history: Stronger credit usually earns a lower APR.
  • Loan term: Longer terms often carry a higher APR and always mean more months of interest.
  • Down payment: Putting more down lowers the amount financed and can improve the offer.
  • New or used: New vehicles sometimes qualify for special manufacturer financing that used vehicles do not.

Common Questions

Is a 0% APR offer real?

Yes, on select new Chevrolet models when a manufacturer offer is running, and you qualify. These offers change, so check current Chevrolet offers before you shop.

Does applying online affect my APR?

Applying doesn’t change your APR by itself, but submitting a credit application is a hard credit check, which can lower your credit score by a few points for a short time. If you’re shopping around, try to submit all your auto loan applications within about two weeks. Credit scoring models generally count several auto loan checks in a short window as a single inquiry. Once your application is in, our finance team can show you what lenders are offering.

Where is First Team Hampton Chevrolet?

1073 West Mercury Blvd, Hampton, VA 23666, serving drivers across Hampton, Newport News, and the rest of the Peninsula.