APR (annual percentage rate)

APR exists because a bare interest rate can mislead. By folding interest and certain mandatory charges into one standardized yearly percentage, the annual percentage rate lets you set two loan offers side by side and see which borrowing is dearer, a comparison a monthly payment alone cannot support, since payments also encode term length and deposit. US truth-in-lending rules describe it as the cost of your credit as a yearly rate.

Car-specific wrinkles are worth knowing. In the UK, a finance promotion that states a rate of interest must include a representative example showing a "representative APR". As of September 2026, the FCA defines it as an APR at or below which credit is expected under at least 51% of the resulting agreements, so the advertised rate need not be the one you are offered. A dealer's low-APR promotion may replace a cash discount you could otherwise have negotiated, so price the car before pricing the money. With leases, the cost of money sits inside the payment as a "rent charge", which requires a different comparison discipline.

CarPairly quotes no interest rates, since they are personal and perishable; its TCO tool lets financing cost enter as your own input.