So, you’re looking for a car. You’ve been shopping around and have a few options in mind. Before getting serious about buying a car, take the time to evaluate what you can afford. Use an auto loan payment calculator to help you map out what you’re able to spend. Once you have a number in mind, start looking for car options that are within your budget. Calculating your auto loan in advance will save you from taking on too much debt.
Calculating Your Auto Loan
When calculating your auto loan, factor interest rates, fees, and trade-in allowances into the equation. The auto loan payment calculator will help you compare different scenarios and see a variety of payment options. For example, you can calculate how placing a down payment of $2,000 will affect your overall payment versus a down payment of $5,000. Or you could see what happens if you adjust the term of the loan from, say, 36 months (3 years) to 60 months (5 years). Try calculating your auto loan here:
Calculating your auto loan before you purchase a vehicle also impacts the rest of your budget. It can be overwhelming to walk into a car dealership that holds limitless options and salesmen who are eager to send you out the door with a title in your hands. They can be so persuasive!
Knowing the value of the car you can afford beforehand will save you from drowning in debt a few months down the road. Ask yourself if you feel prepared to make this payment every month, or if the payment will cause your budget to suffer. If you don’t have an up-to-date budget, what better time to make adjustments than before a large purchase? Use this household budgeting worksheet to get started.
Check out ACCC’s Financial Calculators for more useful calculators to help you stay in line with your finances.