This auto loan calculator figures your monthly car payment and loan’s amortization schedule based on the vehicle price, term and interest, discount & tax rates. There is in depth information on this topic right after the application form.

Car acquisition price: *
Down payment:
Auto loan term: *
Interest rate: *
Trade in allowance value:
Sale tax rate:
Auto loan start date: *

How does this auto loan calculator work?

This loan tool can help you simulate and compare between multiple auto loans offers and decide on the suitable one. The data that should be provided for this calculation is:

  • Car price is the value paid for the chosen vehicle.
  • Down payment is the cash you have available for a one time deposit when buying the car;
  • Auto loan term is the numbers of years or months you decide to borrow money and influences the level of the monthly payment;
  • Interest rate is the cost of money assumed to be paid for the amount being financed;
  • Trade in value which represents the discount offered by the producer or seller of the car in order to stimulate the acquisition.
  • Tax rate is the sale tax percent where applicable.
  • Start date meaning the estimated date of the first payment.

The results displayed consist in the following details:

  • Estimation of the monthly payment for the loan amount borrowed;
  • Total paid for the loan together with total interest paid;
  • Total number of payments;
  • Estimated loan pay off date;
  • Amortization schedule with the month by month evolution of the car payment.

The formula behind its algorithm takes account of the compound interest.

Example of a result

In case of a car evaluated at $25,000, with a deposit of $3,000, a trade in allowance value of $1,500, with an interest rate of 5% and a tax percent of 1% taken for 4 years, this auto loan calculator will display the following results:

Monthly Payment $477.86
Auto loan amount borrowed $20,750.00
Total paid $22,937.18
Total interest paid $2,187.18
Total no. of monthly payments 48
Auto Loan Start Date Dec, 2014
Auto loan Payoff Date Nov, 2018
Car price $25,000.00
Down payment $3,000.00
Trade in allowance $1,500.00
Sale Tax $250.00

What to choose: auto loan or leasing?

If you do not have all the money to pay one time the auto you intend to buy, you should know that there are two standard options available: auto loan or leasing.

Whether to lease or buy a car is a hard decision to make because you should consider all the advantages and disadvantages these two financial products have.

At first view, lease might not be that attractive, still it has its own strengths. One of the most important advantages it offers is that the buyer does not pay all of the car value that will afterwards depreciate. By lease the buyer only pays for the initial depreciation of the vehicle. The initial depreciation of a new item means that the auto once bought, starts to depreciate in value. That is why the monthly payment of the lease will most probably be lower than the monthly payment of the car loan.

Another advantage of the lease is that in general the down payment level is lower than in case of the other option.

The main advantage of an auto loan is that when it is paid off, the buyer owns the car while in case of a lease the owner should either negotiate new contract or pay the residual value of the vehicle in order to own it.

A financial comparison of the two products can be made by using this tool and our lease calculator.

Tips to consider before buying a new car

Before such purchase you should take account of few factors that will definitely affect your monthly budget:

- Go for the lowest interest rate and the proper term to repay as these two aspects will have a direct impact on your payment level.

- Decide to buy a car that has a proper fuel consumption rate because the fuel cost will have a long term impact on your monthly budget;

- Choose to buy the right vehicle according to your financial possibilities and suitable to your needs, which means you have to know that an expensive one has higher maintenance, insurance and service costs than a less expensive car.

- If you own an old auto, think twice before buying a new one because in general the value of new products, once bought starts to depreciate at a rate higher than in the case of a used one.

The advantages of buying an old car instead of a new one

  • Purchase price is lower in case of used cars than in the case of new ones.
  • Depreciation is higher in case of new cars than in case of the used ones. For instance new vehicles depreciate approx. 40% of their value within the first 2 or 3 years. After 2 or 3 years the depreciation rate goes down which means buying used autos seem to be much more efficient from the financial point of view.
  • Sales tax and insurance costs for new vehicle is higher than in case of an old one.

20 Dec, 2014