Car Financing Calculator

Everyone will, at some stage of their life, be in the market for a new or pre-owned car, and it is a good idea to determine exactly how that purchase will affect one’s financial situation before plunging ahead and buying a car.

A car financing calculator is a free internet tool available to consumers who are researching purchasing an automobile and which, when used, will tell them things like how much they can afford to pay for a car, whether it is better to buy or lease a car and exactly what type of purchasing agreement they should become party to. Car financing calculators can be found on most car dealers’ websites and are not difficult to use. Several different types of financing calculators are available, and which one a consumer will make use of will depend on exactly what he wants to find out.

The most popular type of car financing calculator is probably that commonly known as the auto loan calculator, which will determine what the consumer’s monthly payment will be if he buys a particular vehicle. The information that is required to be entered in order for this calculator to reach the necessary conclusions includes the vehicle price, the down payment amount, any applicable trade-in amount and the sales tax amount. The interest rate and the payment term – how many months it will take to pay the purchase price – can sometimes be predetermined and, in these cases, would automatically be inputted by the program. Once the aforementioned information has been entered into the calculator, it will then determine the relevant monthly payments.

Further car financing calculators include the calculator that determines how much a particular consumer can afford to pay for a car and the calculator that determines which, out of a cash-back sale agreement and a low interest sale agreement, would suit a customer best. While the affordability calculator requires much the same information as the auto loan calculator, the cash-back vs. low interest calculator will require information concerning both potential agreements to determine which is the best.

A further common car financing calculator is the one that will, when used, indicate which makes the most financial sense for a particular consumer out of an outright purchase and a long term lease. In order for this calculator to work correctly, information concerning both the loan agreement – relevant to the outright purchase – and the lease agreement has to be entered, and, for the lease agreement, this would include the vehicle’s residual value. Once all information has been inputted, the calculator will determine the consumer’s total cost to own the vehicle in terms of both types of agreements, and the consumer can then see which of the two is the best option.

Although the different types of car financial calculators available on the web are extremely competent financial tools, it is recommended that a consumer still discuss buying a car with a financial specialist experienced in the vehicle industry before making any final decisions.