Auto Loan Calculators for the Masses
A Credit Article Contributed by Mark Mcclelland
Basic Facts about Auto Loan Calculators
If you're in the market for a new or used car, or looking at leasing options, the need for a good auto loan calculator is quickly becoming a fact of life. Most of the calculators available through either on-line auto dealerships or specialty web sites are so easy to use, and provide so much loan information in response to your providing just a few bits of data, that you'd be silly not to take advantage of the power they provide in helping you scope out your options and narrow your choices.
You can easily use an auto loan calculator to play around with a number of questions you might have; for example: what happens to payment amounts and terms when you choose different interest rates, or what happens to your payment term when you choose to pay different amounts.
What Data Do You Provide Auto Loan Calculators
The actual data you need to provide the calculator in order for it to do it's job depend on the specific calculator. If you understand that, in essence, the basic job of the calculator is to tell you what your monthly payments will be, it's easy to see that what the calculator needs as input is the total amount of the loan, the annual interest rate, and the term of the loan in months. The calculations are easy.. well, maybe not for us, but for a computer they are.
Any complexities that arise come primarily from the calculation of the total amount of the loan. This amount reflects not only by the actual purchase price of the vehicle itself, but must include many other factors as well, like the value of any trade-in, any local and state sales taxes, any fees, administrative and otherwise, and more.
Now, if the specific calculator you're using is associated with an auto dealership, in say Collin County, Texas, it may be "smart" enough to plug in the appropriate tax rates for you; then again, it may not. But don't be intimidated, whatever the case, the amount if information you'll need to provide is really minimal.
What Do Auto Loan Calculators Tell You
As stated above, the basic job of any auto loan calculator is to tell you what your monthly payments will be... after all, that's what your primarily interested in isn't it? But the fact is that most calculators can churn out a large amount of information concerning your possible purchase or lease, and this information can easily help you narrow your field of possible choices.
The more sophisticated calculators will figure not only your monthly payments but also the effective interest rate for your loan, the total number of months, total amount of cash used to purchase or lease, total dollar amount of your loan considering any trade-in value, delivery , administrative and other fees, title transfer fees, sales tax percentage rates, sales tax amounts, net down (nominally this is any cash down payment + trade-in value), overall price of the vehicle or lease, and the overall amount of the loan.
Even though less sophisticated loan calculators may not provide you with quite as much detail, there's still plenty to help you save money and make your decision process simpler.
