Car Financing Calculator
The car financing calculator is a comparative instrument that enables an investor to evaluate the open options to him from a wide range of choices. Where the investor can narrow down the available choices to a chosen few, it helps the investor calculate the different lending rates and helps them choose the best financing option with most benefits.
Auto financing calculator takes into consideration many variables such as the negotiated cost of the vehicle, sales tax, term of payment or the repayment period, the interest rate on offer ,the down payment to be made and the trade in value of a previously owned vehicle. The auto financing calculator also enables the purchaser find a repayment plan that is made according to the individuals requirements by determining the monthly outflow expected from the investor over a given period of time.
The car financing calculator help the buyer compare between several financing options like a bank or any financial institution and low interest dealer financing. Dealers and manufactures often offer low-interest financing to buyers and combining low interest finance with a high interest financial institution in most cases provides a lower initial balance and a lower monthly payment.
How to use the car financing calculator
The following are the steps followed in using the car financing calculator.
1. Price of the vehicle. This is the final price that as the buyer, you are willing to pay and it is advisable to include prices of all other added options.
2. Interest rate. This is where you enter the estimated interest rate of the vehicle in the car financing calculator that you estimate to be credited when repaying the loan and usually vary depending on the latest rates in the financial institutions. It is the cost of financing a car loan.
3. Title transfer. The total of all upfront fees that is due to signing.
4. Trade-in allowance. This is the price that the dealer will take off the automobile in exchange to your previously owned vehicle. In case of no trade occurrence, just leave it like that or enter a zero.
5. Down payment. This is the first payment towards purchasing a car .It is usually a mandatory payment and is in most cases 50% or the half price of the automotive.
Importance of the car financing calculator
The car financing calculator is an important tool and basic since it helps car buyers in the following ways
1.the auto financing calculator allows you to see how the interest rates will affect your monthly payments hence one is able to prepare himself as well as budget himself on how to finance his car loan and make sure that other areas are not affected.
2. One is able to compare the available financing options for the exact same loan with a car financing calculator, each with a different mode of payment.
Terms used in automotive financing calculators
There are several terms used in car financing calculators and they will help you understand more. They include:
1. Total purchase price: - This is the total cost of the automotive and it includes the total cost of the car, any additional options and any destination charges. Sales tax should not be included in this amount.
2. Cash down:-. This is the total amount used in this purchase hence the larger your cash down payment the less the loan you will need to finance in your purchase.
3. Manufacturer rebate: - This is a certain amount of money paid by the manufacturer to you when you purchase a new car. Most manufacturers offer a choice between low interest financing and a manufacturer rebate but not both.
4. Sales tax rate: - This is a sales tax percentage charged on your purchase.
5. Trade- in allowance: - This is the total amount given to you for any automotive that you trade in as part of the purchase. In some countries, a trade-in can reduce the amount of sales tax you will owe.
The car financing calculator is very useful especially for automotive buyers in that they are able to choose the best car financing options and plan on how to repay.
Auto financing calculator takes into consideration many variables such as the negotiated cost of the vehicle, sales tax, term of payment or the repayment period, the interest rate on offer ,the down payment to be made and the trade in value of a previously owned vehicle. The auto financing calculator also enables the purchaser find a repayment plan that is made according to the individuals requirements by determining the monthly outflow expected from the investor over a given period of time.
The car financing calculator help the buyer compare between several financing options like a bank or any financial institution and low interest dealer financing. Dealers and manufactures often offer low-interest financing to buyers and combining low interest finance with a high interest financial institution in most cases provides a lower initial balance and a lower monthly payment.
How to use the car financing calculator
The following are the steps followed in using the car financing calculator.
1. Price of the vehicle. This is the final price that as the buyer, you are willing to pay and it is advisable to include prices of all other added options.
2. Interest rate. This is where you enter the estimated interest rate of the vehicle in the car financing calculator that you estimate to be credited when repaying the loan and usually vary depending on the latest rates in the financial institutions. It is the cost of financing a car loan.
3. Title transfer. The total of all upfront fees that is due to signing.
4. Trade-in allowance. This is the price that the dealer will take off the automobile in exchange to your previously owned vehicle. In case of no trade occurrence, just leave it like that or enter a zero.
5. Down payment. This is the first payment towards purchasing a car .It is usually a mandatory payment and is in most cases 50% or the half price of the automotive.
Importance of the car financing calculator
The car financing calculator is an important tool and basic since it helps car buyers in the following ways
1.the auto financing calculator allows you to see how the interest rates will affect your monthly payments hence one is able to prepare himself as well as budget himself on how to finance his car loan and make sure that other areas are not affected.
2. One is able to compare the available financing options for the exact same loan with a car financing calculator, each with a different mode of payment.
Terms used in automotive financing calculators
There are several terms used in car financing calculators and they will help you understand more. They include:
1. Total purchase price: - This is the total cost of the automotive and it includes the total cost of the car, any additional options and any destination charges. Sales tax should not be included in this amount.
2. Cash down:-. This is the total amount used in this purchase hence the larger your cash down payment the less the loan you will need to finance in your purchase.
3. Manufacturer rebate: - This is a certain amount of money paid by the manufacturer to you when you purchase a new car. Most manufacturers offer a choice between low interest financing and a manufacturer rebate but not both.
4. Sales tax rate: - This is a sales tax percentage charged on your purchase.
5. Trade- in allowance: - This is the total amount given to you for any automotive that you trade in as part of the purchase. In some countries, a trade-in can reduce the amount of sales tax you will owe.
The car financing calculator is very useful especially for automotive buyers in that they are able to choose the best car financing options and plan on how to repay.
