This car payment calculator estimates your monthly payment and the amortization schedule of your auto loan and takes account of the trade in value and sale tax as well. There is in depth information on how to choose the right car finance plan right after the tool.
How does this car payment calculator work?
This tool can help you get an image of all the payment details you should take account of before deciding what finance plan to choose or whether you can afford new debt.
In order to do that you have to fill in the following fields:
- Car price is the value of the vehicle you intent to buy.
- Down payment represents the funds you have available to make a onetime deposit when buying it;
- Term for which you borrow money and it can be expressed either in years or months;
- Interest rate is the cost of the money you are about to borrow;
- Trade in allowance is the discount the producer or seller offers in order to stimulate you make the acquisition.
- Tax rate is the sale percent applicable.
- Start date is the moment you expect to make the first payment on your auto loan.
Example of a result
Let’s take for instance a car valued at $20,000 with a down payment of $5,000, for 36 months at an interest rate of 5%, with a $1,000 trade in discount and a tax rate of 4%, starting Dec, 2014. This car payment calculator will generate a detailed amortization schedule showing the evolution of the auto loan month by month
together with the following results:
Summary:
| Monthly payment | $443.57 |
| Loan amount borrowed | $14,800.00 |
| Total paid | $15,968.49 |
| Total interest paid | $1,168.49 |
| Total no. of monthly payments | 36 |
| Auto loan Start Date | Dec, 2014 |
| Auto loan Payoff Date | Nov, 2017 |
| Car price | $20,000.00 |
| Down payment | $5,000.00 |
| Trade in value | $1,000.00 |
| Sale Tax | $800.00 |
What to consider when comparing auto loans?
Probably the most important aspect to consider when comparing auto loans is the interest rate because it impacts directly the monthly payment level. The higher this rate is the higher the regular payment will be.
Another side you have to analyze is the length of the loan as the shorter is the higher savings in interest you can make.
Last but not least the eligibility criteria and the deposit rate the creditor asks for, as you may find great offers but which require too high down payment percent.
What to analyze when buying a car?
Car buy is an expense that must be carefully analyzed well in advance as it will affect your total monthly expenses level. In order to avoid any potential default, you have to take a look at all factors that define car affordability:
- Fuel consumption cost is an important aspect when choosing a vehicle because, on long term, it will impact the transportation costs of your family.
- Maintenance costs is another aspect to taking into consideration as for instance an expensive car will most probably require higher maintenance costs than a cheaper one;
- Insurance costs represent other expense than came with the auto. For instance expensive cars tend to have higher quotes.
To conclude before any decision you have to consider both the car loan costs and the regular costs that come with the acquisition. The long term expenses, even though they do not seem important, they will affect your monthly budget much more than the debt payments.
20 Dec, 2014