Auto loan calculators can help consumers determine precisely what an automobile will cost them in terms of a monthly payment. To use a loan calculator to determine a monthly cost, the user will need to insert the amount of cash they plan to put down on the vehicle; any trade in allowance that is subtracted off the total price of the vehicle; the term of the auto loan; whether or not there is any remaining amount to pay off on the trade in; the total purchase price; the interest rate of the loan and any additional fees that the loan is used to cover. Finally, the percentage of sales tax that applies will also need to be inserted into the calculator. Below is an example of what an auto loan calculator will produce.
Consider that the total purchase price of the vehicle is at $25,000. The cash put down on the vehicle is $2000. The consumer decides to trade in their old vehicle which has a blue book value of 5,000 dollars, but there is 3,500 dollars left to pay off the vehicle. Registration fees are included in the amount of $75.00. The interest rate of the auto loan is 9 percent. Finally, sales tax is figured at 8 percent. The auto loan calculator will calculate that the monthly payment the consumer will be responsible for will be $576.31.
Auto loan calculators can help consumers determine if they can really afford the car they desire by giving them a realistic look at their monthly payment responsibilities. Consumers will be able to determine whether or not they will be able to make such a payment, every month for the term of the loan. If someone is looking to get a car loan, then the use of an auto loan calculator is financially prudent and responsible. When a loan calculator is used, the consumer is making a completely informed decision before they sign on the dotted line of an auto loan agreement.