What is the rule of 78 for cars?

The Rule of 78 is a loan interest calculation method sometimes used in car financing that front-loads the interest payments. Instead of spreading interest evenly over the life of the loan, this method requires you to pay more interest in the early months and less toward the end. This means that if you pay off your car loan early, you may save less on interest than you would with a standard simple interest loan. Understanding the Rule of 78 is important before signing a loan agreement, as it can affect the total cost of your vehicle financing.