PriceProtect™
DriveShield™
GarageGuard™
Services
Insurance
Car Insurance
Compare Car Insurance with Jerry
Jerry’s Expert Advice
Car Insurance Estimates
Home & Renters Insurance
Renters Insurance
Repairs
Car Repair Estimates
Repair Estimates for Popular Services
Advice
Read Car Content
Browse Jerry Car Advice
Check Out Expert Car QnA
Learn About How We Create Content
Jerry Data & Research
What is an effective interest rate on a car loan?
I got a 0% APR car loan through the dealer, but the contract says the effective interest rate is 1.79%. What is the effective interest rate on a car loan, and how do I have any interest rate at all on a 0% APR deal?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“An effective interest rate is what you pay in interest after all
taxes and fees
are added to your loan. Many 0% APR deals have a cost of borrowing, which is quoted per $1,000 borrowed. With this, you might see a $19.99 fee due per $1,000 financed. A cost of borrowing is typically clerical or other fees added to the 0% portion of the loan.
Because of this, not every 0% APR loan is actually 0%. To determine what other fees or charges may be associated with your
loan
, you should look into the terms and conditions section of your finance paperwork. Even with extra fees, 1.79% for a new car is a great rate, so there’s a silver lining in your situation.
Insurance for your new car can be quite expensive. If you want to ensure you have found the best rate for your new vehicle, use the free
Jerry
app. Jerry compares rates from the top 50 companies in under a minute, delivering the best deals to your phone.”View full answer
- Gregory R.
WHY YOU CAN TRUST JERRY
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.
Join 4M+ members in lowering their car insurance
You Might Also Be Interested
Read Advice From Car Experts At Jerry
What Others Are Asking
Browse More Content
Insurance in Your State
Easiest way to compare and buy car insurance
No long forms
No spam or unwanted phone calls
Quotes from top insurance companies