Learning how to budget your money, when you decide to replace your old vehicle with a new one, is a tedious thing to do. A bit of calculation is required to land on a much better decision.
Here are the steps on how you can easily calculate your monthly loan payment for a new vehicle:
- Look for the price of your old vehicle – search for the trade-in value for the vehicle you are selling. You may want to use the Internet for ease. Try to search and compare more than one trade-in value of your car. The reason is because most brokers will try to lower the value of your car so that they could gain higher profit when they sell it again. Determining the price of your old vehicle is essential since eventually it will be a factor on how much you will be paying for your new vehicle. Another benefit of trading-in is that you won’t pay tax on it.
- Search for the original starting price of your new vehicle – find the price of the new vehicle that you want. Find different prices from different brokers on the vehicle you desire to have.
- Search for predetermined average percentage rate (APR) – look for companies that can offer you the lowest average percentage rate. This will determine the actual monthly loan that you will be paying. Having a predetermined APR is important since the company cannot raise your loan rates anymore. Just be sure to check if the company you will be applying to is legal.
- Settle on your down payment – a good financial planner may help you decide upon how much you need for your down payment. This will make sure that you pay a high amount without draining your financial resources. Having a good amount of down payment will lower the interest that you will be paying for on your new vehicle.
- Calculate your new monthly loan payment – do you know that you can calculate your auto loan within a few seconds? The glory goes to online loan calculator. There are many websites that can actually calculate this for you in a matter of seconds. The main factors here are the price you will be paying, the number of months you will be paying for it, the interest rate and finally, the value of the car at the end of the loan. The less a car loses its value over the course of the loan, the less you will be paying. This is a good indicator that you should go after cars that keep their value for long periods of time.
This is actually very simple and it can save you a lot of time and effort by not having to go out of your way just to find these companies. This way, all you have to do is get the best quotes from an online broker, input them into the online loan calculator and it will compute your vehicle loan payment in a short amount of time.