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How can I avoid finance charges on my car loan?

I'm tight with money, and I don't want to pay more than I have to. Is there a way to avoid finance charges on my car loan?

Eric Schad · Updated on Oct 25, 2021

Reviewed by Shannon Martin, Licensed Insurance Agent.

We totally understand that you’re looking to save money, but let’s clear up what finance charges refer to.

Finance charges on a

refer to any cost from borrowing money. Finance charges can include:

Interest rates

Origination fees

Administrative and clerical fees

Prepayment penalties

Late fees

While some of these are unavoidable, such as an interest rate or administrative fees, you can bypass others by simply making your payments on time. If you want to save even more money, you should offer to pay the origination fees and clerical fees upfront. By paying these fees upfront, you eliminate interest payments on them.

You can also lessen the impact of interest by paying your loan off early. As long as your lender doesn’t have any

prepayment penalties

, you can put more money toward the car each month until you pay it off.

Since you’re looking to save money, you should consider shopping around for car insurance. Sign up with

to compare quotes from up to 50 different insurers in just minutes. The average Jerry user saves $879 per month!

More:

What is APR and how is it calculated?

View full answer

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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.

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