How to Figure out a Car Payment
If you're in the market for a new car, it's important to know the monthly payment you can afford. Even if you're not great at math, it's fairly simple to figure out a car payment, thanks to online auto calculators. You can enter all the financial details into the calculator to figure out the payment so you know just what you can and cannot afford. Follow these steps to help you find that perfect car that won't leave you broke!
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Instructions
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How to Figure Out a Car Payment
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Visit the CarSense website (see Resources), which has a calculator that helps you determine your monthly car payment. The calculator will tell you how much you can afford to spend on a car.
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Enter the price of the car you'd like to purchase in the first box. If you aren't sure what car you want or how much you think you'll spend on a new car, just choose a ballpark figure. You should already have an idea of how much you want to spend, so go with that amount.
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Enter the amount you plan to use as a down payment on the car. If you aren't sure you will be able to afford a down payment (which many auto dealers will require), you can leave it blank. Keep in mind, though, that a down payment can help tremendously, depending on the price of the car you purchase. It will lower your payments and help you pay your car off that much quicker.
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Enter the term of the loan. Depending on how much you can afford for a monthly car payment, you may opt to go with a shorter loan term. If you know you cannot afford very much every month, choose a longer term. This will also lower your payments. Remember that you can always pay more when you have the money. You have to pay the minimum payment, but they will not turn down higher payments.
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Now enter the interest rate of the loan. This can be difficult to figure out if you haven't purchased a car recently and aren't sure what rate you qualify for. Your credit can be a factor in this decision. If you know you have decent credit, you could probably get away with a 5 or 6 percent loan. Otherwise, enter a higher rate (such as 10 percent) if you know you have bad credit, just to be on the safe side. If it turns out you are eligible for a lower interest rate, then your monthly payment results will be lower as well.
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Enter the amount you are financing. For instance, if you chose to go with a $10,000 loan and are able to make a down payment of $3,000, then you will be financing $7,000 or $8,000. You want to estimate a little higher to include all the extra fees that occur when purchasing a new car. Having these covered in the financing section will help the calculator work better for you.
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Click on Calculate to see your monthly auto payment.
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