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Today You'll Learn How To Calculate Approximate Car Payments Without Using Loan Calculators. Learn One Of The Biggest Kept Secrets In Car Sales Your Car Salesmen May Not Even Know About.
When car buyers arrive at car dealers most dont bring car loan calculators. This car buying guide will show you how to narrow down approximate car payments within cents of actual car payments. Learning how to calculate car payments is a crucial step when negotiating good car deals. Its not difficult and with a little practice it will become second nature.
Divide A New Cars Price Invoice Price By Months Financing
Take the cars price and divide it by the months your financing the car for. This is called your cars principle payment. Principle is the minimum car payment you need to pay monthly to pay back the car loan. For example if you shop a $21,000 car and with car rebates and invoice price buy the car for $18,000 and finance it for 60 months. You would have to pay $300 a month for 60 months to pay back the $18,000.
Find the cars interest rate you qualify for. Then multiply the interest rate by three. For example if you qualify for 7%.
7% is your cars interest rate although you're charged interest monthly not just once. By multiplying 7% by 3 you get 21%. 21% is what you would approximately pay back over the life of a car loan at 7%. If $300 is the principle payment then $63 is the approximate interest since $63 is 21% of a $300 payment.
Add the principle payment of $300 and interest payment of $63 and your approximate car payment is $363. Check our calculator below when borrowing 18,000 at 7% for 60mo you pay $356.42. You were off by $6.58 not bad especially had you been on a car lot without a loan calculator. Had you accepted a $423 car payment for 60 months that would've been $3600 more. This is why its important to calculate approximate car payments and not guess car payments. Do you know friends or family who could use these easy car buying tips calculating car payments why not help share us with them on Facebook.
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