Bankrate Auto Loan Calculator With Trade In And Amount Owed

Auto Loan Payment Formula:

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

Vehicle Price:

Tax:

Fees:

Down Payment:

Trade-In Value:

Amount Owed on Trade:

Interest Rate:

Loan Term:

months

Loan Principal (P):

Monthly Payment (PMT):

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is the Auto Loan Calculator?

This calculator helps determine your monthly auto loan payment, accounting for trade-in value and any amount still owed on your trade-in vehicle. It uses the standard loan payment formula adjusted for these factors.

2. How Does the Calculator Work?

The calculator uses two formulas:

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

Where:

\( P \) — Loan principal amount
\( price \) — Vehicle purchase price
\( tax \) — Sales tax
\( fees \) — Additional fees
\( D \) — Down payment
\( trade\_value \) — Trade-in value of current vehicle
\( owed\_on\_trade \) — Amount still owed on trade-in vehicle
\( PMT \) — Monthly payment
\( r \) — Monthly interest rate (annual rate ÷ 12)
\( n \) — Loan term in months

Explanation: The first formula calculates the actual amount being financed, while the second calculates the monthly payment based on that amount.

3. Importance of Accurate Loan Calculation

Details: Understanding your exact monthly payment helps with budgeting and ensures you don't overextend yourself financially. The trade-in and amount owed adjustments are crucial for accurate calculations.

4. Using the Calculator

Tips: Enter all required fields (price, interest rate, and term). Other fields default to 0 if left blank. For best results, have all your loan details available before calculating.

5. Frequently Asked Questions (FAQ)

Q1: How does a trade-in affect my loan?
A: Your trade-in value reduces the amount you need to finance, while any amount owed on the trade-in increases the loan amount.

Q2: Should I include taxes and fees?
A: Yes, for accurate results. These amounts are typically rolled into auto loans.

Q3: What's a good interest rate for an auto loan?
A: Rates vary by credit score, but as of 2023, average rates range from 3-10% for new cars and 4-14% for used cars.

Q4: How does loan term affect my payment?
A: Longer terms mean lower monthly payments but higher total interest paid over the life of the loan.

Q5: What if I have negative equity in my trade-in?
A: This calculator accounts for that - just enter the amount you owe as a positive number in the "Amount Owed on Trade" field.