Without a doubt, one of the best tools to use when shopping for a car is a car loan calculator. A car loan payment calculator helps shoppers visualize what interest payments add up to over time, showing the differences between interest rates and the trade-off that consumers must make when selecting a loan with a lower down payment. Car loan calculators take all the guess-work out of auto financing, and they require little to know understanding of the complex mathematics behind loan payments.
Edmunds Car Loan Estimator
The automotive research website Edmunds.com provides a useful car loan calc that can be filled in with a variety of information based on the selected car. Edmunds automatically looks up the value of a car and subtracts trade-in value and down payment to get an idea of how much a loan will cost.
Bankrate Auto Calculator
One of the largest financial planning websites in the world, Bankrate, has a number of useful calculators and tools that you can use to estimate loan payments. On the auto calculator page, enter in the loan amount (the total value of the car minus the trade-in value and the down payment) and the auto loan terms. This will give you an idea of the monthly loan payments, and it also shows the benefit of making extra payments periodically on the principle.
Yahoo! Autos Monthly Loan Payment Calculator
The Yahoo! Calculator is more geared towards individuals who are planning to purchase a new car, as it populates the fields of the form automatically with the MSRP of a selected new vehicle. One of the best features of this calculator is the automatic calculation of rebates that might be awarded for the purchase of certain vehicles, such as the Zero Emissions rebate for purchasing an electric vehicle in California.
Using Online Auto Loan Calculators
Auto loan calculators are best used for planning purposes, such as deciding how much to spend as a down payment on a car. As you can tell from the calculators, many loan decisions involve several trade-offs. While a lower down payment saves money in the short term, it results in higher payments over time and costs more money in the long term. Additional payments on an annual or monthly basis help reduce the total amount paid on a loan by directly subtracting from the principle and making every consecutive payment smaller.