HOW TO CALCULATE CAR PAYMENTS AND INTEREST RATES

Three Simple Steps To Calculating New Car Payments



Car Buying Advice Calculating Car Payments
When car buyers arrive at car dealers most dont bring loan calculators. This car buying guide will show you how to narrow down aproxament car payments within cents of the actual car payment. Understanding how to calculate car payments is a crucial step in negotiating a good car deal and controling your car purchase. Its not difficult and with a little practice it will become second nature.




First Step In Calculating Your Car Payment
On a piece of paper take the balance you are looking to borrow and divide it by the months you want to finance. This is called your principle payment. Principle is the minimum payment you have to make to return the balance borrowed.

Example..If you find a $21,000 car and negotiate the price to $18,000 and finance for 60 months. You would have to pay $300 a month for 60 months to return the $18,000. $300 would be your principle payment for $18,000 at 60 months. For 72 months (6 yrs) it would be $250 a month.




The Second Step In Calculating Car Payments
Do a little research to look into what interest rate you qualify for. Take this interest rate and multiply it by the number three. For example if you should be able to qualify for  7% multiply 7 times 3 this is 21. Now multiply this number by the first number of your principle payment from step one $300 you will get 63. $63 dollars is the aproxament monthly interst to borrow $18,000 at 7% for 60 months.




Final Step In Calculating  Car Payments
Add the principle payment from step one and interest payment from step two together to find your aproxament car payment.
300 + 63=$363. Simple huh who would of thought. Yet when car buying we are told as car buyers countless stories why we need this and that. If we accept a car payment thats $60 more than it should be. Over 60 months thats $3600 more. That could be used to over sell a car extended warranty or accessories like rims,window tint,or wheel locks

 
Try this a few times and soon you will be able to do this in your head. Search your new vehicles invoice price then try our loan calculator to check what car payments to expect. Together we can all start to make a difference so remember to share us with a friend today.