How to Figure Out a Car Payment

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The best way to figure out a car payment is based on how much equity there is in the car and how much it is amortized over a period of time. Discover how to get a lower car payment with advice from a registered financial consultant in this free video on money management.

Part of the Video Series: Personal Finance Tips
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Video Transcript

This is Patrick Munro talking about how to figure out a car payment. Having an automobile, especially a new one, is an exciting experience. Many auto makers, especially now a days with the problems that auto makers have had, offer some wonderful financing offers. Sometimes it's zero percent financing for a long period of time. There are dealer incentives that go involved with the car and things of that nature. But the best way to figure out a car payment is base on how much equity you have in the car. And, as well, how that is amortized over a period of time. Car loans used to be only thirty-six months in nature because cars didn't used to be that expensive. Now a days, new cars range anywhere from 30 to 100,000 dollars just for a basic, semi-luxury car. So financial terms have gone out further. Sixty months, seventy-two months even eighty-four months is not uncommon. So, depending on the further out you are, this will result in a lower car payment. And sometimes if it's a car that's worthy of that length of time, that's a good way to go. This is Patrick Munro talking about how to figure out car payments.

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