1. What is the Edmunds Car Loan Calculator?

The Edmunds Car Loan Calculator estimates your monthly car payment including sales tax and down payment. It helps you understand the financial commitment of a vehicle purchase before visiting a dealership.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

Where:

• \( P \) — Principal loan amount
• \( price \) — Vehicle price
• \( tax \) — Sales tax amount
• \( D \) — Down payment
• \( PMT \) — Monthly payment
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Loan term in months

Explanation: The formula calculates the fixed monthly payment required to pay off the loan over the specified term, including interest.

3. Importance of Accurate Loan Calculation

Details: Understanding your exact monthly payment helps with budgeting and ensures you don't overextend yourself financially when purchasing a vehicle.

4. Using the Calculator

Tips: Enter the vehicle price, estimated sales tax, your planned down payment, the interest rate you qualify for, and the loan term in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Should I include registration fees in the tax amount?
A: No, this calculator only accounts for sales tax. Registration fees should be considered separately.

Q2: What's a typical down payment percentage?
A: Generally 10-20% of the vehicle price is recommended, but this varies based on your financial situation.

Q3: How does loan term affect my payment?
A: Longer terms reduce monthly payments but increase total interest paid. Shorter terms have higher payments but lower total cost.

Q4: What interest rate should I expect?
A: Rates vary based on credit score, lender, and market conditions. As of 2023, rates typically range from 3% to 10% for qualified buyers.

Q5: Does this include insurance costs?
A: No, this calculator only estimates the loan payment. Insurance should be budgeted separately.