Under the Truth in Lending Act, which charges must be disclosed when financing a vehicle?

The Truth in Lending Act (TILA) mandates that lenders disclose specific financial information to borrowers clearly and conspicuously, allowing consumers to make informed decisions when taking on credit. Among the key disclosures required is the Annual Percentage Rate (APR). The APR reflects the true cost of borrowing, as it includes not only the interest rate but also any associated fees and charges expressed as a yearly cost. This enables the buyer to understand the overall cost of financing over the term of the loan and allows for easier comparisons between different loan offers.

The total cost of the car, while important, does not fall under the specific disclosure requirements of TILA as it pertains to financing. The down payment amount is also necessary information but is not categorized as a financing charge that must be disclosed in the same way as the APR. Insurance fees, while they may affect the overall cost of acquiring and owning a vehicle, are not covered under TILA's financing disclosure requirements. Thus, among the options presented, the Annual Percentage Rate is the correct answer as it is a critical component in understanding the financial obligations involved in vehicle financing under the Truth in Lending Act.