Auto Loan Payment Calculator With Trade-in

Loan Principal Formula:

\[ P = \text{price} + \text{tax} + \text{fees} - \text{down} - \text{trade\_value} + \text{owed\_on\_trade} \]

Vehicle Price:

Tax:

Fees:

Down Payment:

Trade-in Value:

Amount Owed on Trade:

Interest Rate:

Loan Term:

months

Effective Principal:

Monthly Payment:

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1. What is the Auto Loan Payment Calculator?

This calculator helps determine your monthly auto loan payment, accounting for trade-in values and outstanding balances on your current vehicle. It calculates the effective principal and monthly payment based on all financial factors in your auto purchase.

2. How Does the Calculator Work?

The calculator uses the following formulas:

\[ P = \text{price} + \text{tax} + \text{fees} - \text{down} - \text{trade\_value} + \text{owed\_on\_trade} \] \[ \text{Monthly Payment} = P \times \frac{r(1 + r)^n}{(1 + r)^n - 1} \]

Where:

$ P $ — Effective principal amount
$ r $ — Monthly interest rate (annual rate ÷ 12)
$ n $ — Loan term in months

Explanation: The formula accounts for all financial aspects of the vehicle purchase including taxes, fees, down payment, trade-in value, and any outstanding balance on the trade-in vehicle.

3. Importance of Accurate Loan Calculation

Details: Understanding your true loan principal and monthly payment helps with budgeting and ensures you're getting a fair deal. It accounts for all financial factors including negative equity from your trade-in.

4. Using the Calculator

Tips: Enter all amounts in dollars without commas. Be sure to include all fees and taxes. For the trade-in section, enter both the value the dealer is giving you and any amount you still owe on that vehicle.

5. Frequently Asked Questions (FAQ)

Q1: Why include the amount owed on my trade-in?
A: If you owe more than your trade-in is worth (negative equity), this amount gets added to your new loan. If you have positive equity, it reduces your loan amount.

Q2: Should I include registration fees?
A: Yes, include all fees that will be financed in the loan. Some states include registration fees in the tax amount.

Q3: How does down payment affect my loan?
A: Your down payment directly reduces the amount you need to finance, which lowers both your monthly payment and total interest paid.

Q4: What if I don't have a trade-in?
A: Simply enter $0 for both trade-in value and amount owed on trade.

Q5: Why is my calculated payment different from the dealer's quote?
A: Dealers may include additional products (warranties, insurance) or use different rounding methods. Always review the full breakdown.