A car payment is a monthly payment made by an individual to a financial institution, such as a bank or credit union, for the purchase of a vehicle. This payment typically covers the cost of the loan taken out to buy the car and includes interest charges on the loan. The term "car payment" can also refer to the amount of money one must pay each month in order to keep their vehicle. In this sense, it is similar to renting an apartment where you have to make regular payments to use the property.