The Auto Loan Centre Car Loan Calculator
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When it comes to getting an auto loan, figuring out just how much you can afford can be confusing. After all, the price of the car itself is not the only thing you have to consider. Gas prices are expensive nowadays, especially for larger vehicles like pickup trucks and SUVs. Insurance rates tend to be almost as expensive as car payments, and the maintenance and repair costs for cars can be incredibly high. Thankfully, the Auto Loan Centre has put together a brand new calculator that will provide all the information you’ll ever need when obtaining a car loan. All you have to do when using the calculator is input the price of the vehicle, the interest rate, the size of your down payment, and the location where you live. The location input is very important as insurance rates differ between regions.
Why Does Any of This Matter
Most people only focus on the grand total when they buy a car. They’ll see the price tag and decide they can afford it before looking at monthly rates. Our auto loan calculator is important because it will provide you everything you need to know about monthly payments. The amount you pay each month will inevitably determine the nature of your loan agreement.
What Affects Your Monthly Payments
The amount of time you take to pay off the loan is often what changes your rates. Taking a long time to pay it off will result in small payments per month, whereas taking no time at all results in heavy payments per month. Do keep in mind however that when you are paying smaller payments every month, you’re actually paying more overall. Interest rates add up each month and could be responsible for you paying a lot more than you would have had you made a short term agreement.
Interest Rates
Interest rates are an incredibly important factor when it comes to getting an auto loan. Interest rates are calculated on an annual basis and are implemented across each of your monthly payments. For example, if your interest rate is 6.99%, you’re paying an additional 6.99% of the total cost of your car every year.
Trade-Ins
When it comes to buying a new vehicle, you always have the option to trade in your old vehicle. For example, if you’re buying a car that’s worth about $16,000, and you own a car worth about $5,000, you can trade it for the new one. This way you’ll only need to obtain an auto loan for about $11,000. Definitely keep this in mind when obtaining an auto loan. Once you’ve made the deal you’re committed!
Old Vehicles Still Being Paid Off
If your old vehicle is still being paid off, you’ll need to include this in your overall cost. If you still owe the lender a bunch of money from your first loan, chances are that amount will be added to your next loan should you trade in the car. This means your new lender will cover the cost of the loan just to throw it back in with the new one. If the lender is the same person, they’ll simply reorganize your tab. These additions mean your monthly payments will be much higher than you may have expected them to be. This is why you shouldn’t buy a new vehicle if the old one isn’t completely paid off.
Auto Loan Terminology Explanations
We talked about a lot of specifics so now we’re going to explain each and every factor just to ensure you understand the entire process.
The Total Price of a Vehicle
When it comes to the price of the vehicle, you can’t input the original value into our calculator because this will produce inaccurate results. You need to put in the value that exists after savings, deals, and other subsidies are factored in. The advertised cost is not always the same as the total cost! Remember this!
Down Payments
Putting down an initial payment, otherwise known as a down payment, is a fantastic way of reducing your monthly rates. The larger the down payment the lower the rates! For fantastic rates, you’ll need to put down about 20 – 25% of the vehicle’s overall cost. This shows the lender that you’re a responsible buyer, and that you’re dedicated to maintaining an appropriate credit score.
Trading In Your Vehicle
A trade-in price is simply the amount the lender will either give you or cut off of your new loan. The trade-in price is created through the calculation of a bunch of different values. First, the year, make and model are all considered. The original price, the residual value, and the condition of the car are all taken into account as well. Many analysts say this is the best way to lower the cost of an auto loan. To clarify, if your auto loan is $15,000, and your old vehicle is worth $6,000, you only need a loan of $9,000!
Sales Tax
Sales tax is going to depend on the province you are buying the vehicle from. In the province of Alberta, the North West Territories, Yukon, and Nunavut, sales tax is approximately 5%. In Saskatchewan, the sales tax is about 11%. In Manitoba and Ontario, the sales tax is about 13%. In British Columbia, the sales tax is 12%. Last but not least, the sales tax in Quebec, PEI, Nova Scotia, New Brunswick, and Newfoundland is 15%. Do keep in mind that the sales tax does not differ based on where you live. Instead, the place where you actually buy the vehicle is what matters. If you buy the car from PEI, yet live in Ontario, you’ll pay a 15% sales tax rather than the 13% for Ontario.
Payment Frequency
Payment frequency refers to your payment schedule. Depending on your initial agreement, you may have decided to pay off your loan weekly, bi-weekly, monthly, or even bi-monthly. Bi-monthly is the least common, and can only be found with a select number of lenders. Keep in mind that you’re paying different amounts based on the payment frequency. A weekly payment is the same as a quarter of the monthly payment. A bi-weekly payment is equal to half that of a monthly payment. Very simple, yet very important to keep in mind.
Final Thoughts
Never before has it been this easy to calculate all the information pertaining to your car loan. Monthly rates, interest rates, as well as trade-in values are all easily accessible and calculatable using our state of the art auto loan calculator. For more information, please feel free to contact us. Here at the Auto Loan Centre, we are committed to helping you obtain the auto loan you need, as well as helping you to drive away in the car of your dreams. What are you waiting for? Contact us today! Let’s get started. 9 *8 =
