Auto Loan Refinance Savings Formula:
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Auto loan refinance savings represents the total amount you would save by switching from your current auto loan to a new one with different terms. It compares the total payments of your original loan versus the proposed new loan.
The calculator uses the auto loan refinance savings formula:
Where:
Explanation: The formula calculates the difference between what you would pay in total under your current loan versus what you would pay under the new loan terms.
Details: Calculating potential savings helps determine if refinancing makes financial sense. It accounts for both payment amount changes and any extension or reduction of the loan term.
Tips: Enter your current monthly payment and remaining term, then enter the proposed new payment and term. All values must be positive numbers.
Q1: Does this account for refinancing fees?
A: No, this calculates gross savings. Subtract any refinancing fees from the result for net savings.
Q2: What if I extend my loan term?
A: The calculator will show if you're saving money overall, even if paying for longer. A negative result means you'd pay more total.
Q3: Should I always choose the option with highest savings?
A: Not necessarily. Consider cash flow needs and how long you plan to keep the vehicle.
Q4: Does this work for lease buyouts?
A: Yes, if you're refinancing a lease buyout, you can compare the buyout terms to new loan terms.
Q5: How accurate is this calculation?
A: It's mathematically precise for the inputs provided, but doesn't account for early payoff or other variables.