If this your first auto loan, it's important to understand the basic principles of how this financial transaction works.    Here are the basic steps: You apply for a loan to pay for your new vehicle. Once approved for a loan, you agree to your loan terms. These include how much your monthly car payment is, how long your loan lasts, and how your finance charge is. Your terms will depend on your credit history. A better overall credit score will typically result in better loan terms. Over time, you'll pay back the cost of your vehicle—with interest—to your lender. The average car loan duration is 36–60 months. If this is your first time purchasing a vehicle, check out our First Time Auto Buyer Program to see if you qualify for competitive auto financing rates.