AUTO LOANS
Auto loan calculators
You can use online auto loan calculators that enable you to compute the monthly charges needed in making auto loan payments. By using the auto loan calculators online you can have a fair idea how much is monthly payment required for your loan. Also, you can verify the calculation methods used by the lender.
Using the auto loan calculators you must first provide the purchase price or selling price of the car before tax. Then deduct the trade in amount to the gross selling price. The net price is multiplied to the sales tax rate in order to get the sales tax. Then add sales tax and fees to the gross purchase price to get the total price of the car. Then deduct the amount you paid as down payment. Also deduct the net trade-in amount. Net trade-in refers to the trade-in value less the balance owed on the car being traded in. After deducting down payment and net trade-in amount you will arrive at the Loan Amount.
There are different auto loan calculators you can use online. They may arrive at different amount if you use them but they more or less give you an idea on the range of auto loan payments you are expected to make. In using the auto loan calculators you will often come across the following terms:
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Interest rate is a term used in auto loan calculators which refers to the annual charge for the borrowed money.
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APR or annual percentage rate is used in auto loan calculators which refers to the yearly rate of interest and other fees or the costs paid in order to acquire the loan. APR combines the fees and interest into a single rate.
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Term is used in auto loan calculators to refer to the length of time for the loan.
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Cash down in the auto loan calculators refer to the amount of cash paid as down payment. Trade-in allowance used in auto loan calculators is the total dollar amount assigned to your car when trade-in for the car being purchased.
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Amount owed in trade is the total loan balance still outstanding on the car being traded-in.
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Taxable fees used in the auto loan calculators refer to any additional fee subject to sales tax. Non-taxable fees are those fees not subject to sales tax. This refers to document fees and other fees due at delivery and not taxable.
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Sales tax rate required in auto loan calculators refers to the total amount of sales tax on the purchase. In most states sales tax is computed by deducting trade-in value to the purchase price in order to get the sales tax amount. Some states based sales tax directly on the gross purchase price.
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Total down is the net amount paid as down payment. This is computed by getting the cash down plus trade-in and then you deduct the outstanding loan balance on trade-ins.
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Sales price in the auto loan calculators refers to the total price of the car. Loan amount is the total amount of your auto loan.