When you finance your car purchase, it makes the transaction affordable by dividing it into many smaller payments. 

The elements comprising an auto loan include the APR, interest rate, down payment, and term length. 

When you make a down payment on your car purchase, it lessens the loan amount, further reducing your monthly payments. 

When you finance a vehicle, a lender collects interest on the total amount of the loan, also known as the principal. Expressed as a percentage, the interest rate is added to your car payment each month. 

During the loan application process, those with a good credit score usually obtain lower interest rates, while those with a poor credit score experience the opposite. 

The APR on an auto loan, or annual percentage rate, considers the interest rate and any other fees or charges levied by a lender. Due to its comprehensive nature, the APR gives you a clearer picture of your total costs than the interest rate alone. 

The term length of a car loan usually lasts 24-84 months. However, some terms go even longer. Longer-term loans can help you get behind the wheel of something a little more expensive, with more features and options, because they help lower your monthly payments. 

Where can you go for not only a great deal but also a quality used car? Shift offers fair, no-haggle prices driven by powerful machine learning algorithms and tons of data. And at Shift, certified mechanics perform extensive 150-point inspections on every vehicle sold. You can buy any of Shift's cars directly online from the comfort of your home, know it has no hidden issues (from our 150-point inspection) and get a fair, up-front price.

When it's time to divest yourself of your current vehicle, usually there are two options: trading it in or selling it privately.

When you sell your vehicle to a private party, you have many tasks to attend to beforehand. You begin by taking detailed pictures of your car from multiple angles, then posting advertisements, and with those complete, wait for potential buyers to contact you. 

And even when you do find a private buyer to purchase your car, you still need to pay attention to necessary paperwork like transferring the title and signing the bill of sale. 

Conversely, trading in your used car is quick and straightforward. All you have to do is pick the reseller you'd like to deal with, accept their offer, then use the money as a down payment on your new-to-you vehicle. 

Trading in also carries the advantage of saving you money on sales tax. In many states, you only pay sales tax on the remaining amount once you subtract the trade-in value from the sale price. That can save you thousands of dollars, keeping your savings account full for other financial obligations. 

When you decide to buy your next vehicle, you'll probably want to sell your old one. But that can be a hassle, and how can you be sure you receive a reasonable price? But when selling your car to Shift, there's no need to worry about any of that. All you'll have to do is enter the make, model, year, and mileage on Shift's easy-to-use website, and you'll instantly receive a purchase offer that's valid for seven days. You can get a fair offer, better than any dealership, driven by powerful machine-learning algorithms and tons of data.

When you sell a vehicle with a loan on it, the process is similar to when you own it outright. However, you need to take a few additional steps to complete the transaction, and you might want to hold off depending on how much equity you have in the car.

Before moving forward with selling a vehicle you're making payments on, you'll first need to know the loan payoff amount. This is the total of your remaining loan payments and the sum you'll need to pay your lender to gain full ownership and complete the car title transfer.

Once you have that number, consulting with an online resource like Shift's free estimate calculator can help you determine the fair market value of your vehicle.

Next, you'll want to determine whether you hold positive or negative equity in your car. If the outstanding loan balance is less than the value of your vehicle, you have positive equity. But if your remaining payments exceed the market value of your car, you have negative equity or are "underwater" on your loan. 

If you have positive equity, you can profit when you sell your financed vehicle. But if you're upside down on your loan and have negative equity on your car, you could lose money on the transaction, so it may make sense to wait before selling. 

When you sell a financed car with positive equity, the buyer pays the lender the sum of the payoff amount and the purchase price. Then the lender writes you a check for the difference and transfers the title to the new owner. Alternatively, a buyer can write separate checks to you and the lender before taking possession. 

But when you hold negative equity in your vehicle, you pay out of pocket to complete the transaction. First, the buyer pays the purchase price to your lender, and then you pay the remaining balance before they transfer ownership.

Though buying a used car can save you thousands compared to purchasing or leasing a new vehicle, where can you go for one that stands the test of time? Shift offers best-in-class service contracts at a fair price without sales pressure. You get the great price and value of a used car with the bumper-to-bumper protection of a new car. With a Shift Vehicle Protection plan, not only are essential components covered, but you also receive roadside assistance if you run into trouble on the road. Whether you happen to be in the continental U.S., Alaska, Hawaii, or Canada, help is just a toll-free phone call away, 24 hours a day, seven days a week, 365 days a year.