Auto and Car Loan Comparison Calculator
Calculate and Compare your most and least expensive options for auto and car loans
This business case helps you compare auto loan and financing options from dealers, financial institutions (i.e. banks, and credit unions), your line of credit, and a full cash payment. It will guide you through all the principal and interest payments, additional fees and expenses you should know, which can impact your loan choice. Then summarize the results so you can loan option works out cheaper in the long run.
This auto loan comparison calculator also includes options if you trade in, sell privately, and pay off your vehicle loan early. Need more help, check out the User Guide further below.
User Guide for the Auto and Car Loan Comparison Calculator
Do you need help understanding the options for a vehicle purchase? Then use this user guide to explore each of these factors in detail.
1. Purchase Information
- Vehicle List Price: The vehicle’s initial cost is a significant factor. Negotiating a lower price or choosing a more affordable car can reduce the overall cost.
- Tax Rate (%): The sales tax rate in your area can significantly impact the total cost of the vehicle.
- Government Fees: Includes registration fees, title fees, and other charges imposed by government authorities. These fees can vary by location.
- Dealer Fees: Some dealers may charge additional fees, such as documentation or destination charges, which should factored into your decision.
- External Financing Fee: Some lenders may charge fees for external financing instead of their in-house financing options.
2. Current Vehicle Information
- Will you trade-in or sell a vehicle? Decide whether you will trade your current car to the dealer or sell it privately. Each option has different financial implications.
- Estimated Trade-In Value: If you plan to trade in, get an estimate of your current vehicle’s trade-in value. This is usually much lower than the private sale value. However, this route eliminates the headache of preparing your car for sale, allocating time for showings, and negotiating the price.
- Does Your City Allow a Trade-In Tax Credit? Some areas offer tax credits when you trade in a vehicle, which can lower the overall cost.
- Estimated Private Sale Value: If you sell your current vehicle privately, assess its value in the open market using tools such as Auto Trader to see comparables or Kelly Bluebook to create a specific estimate.
- Sale Expenses: Consider any expenses of selling your current vehicle, such as repairs, maintenance, cleaning, detailing, or advertising.
3. Financing Details
- Down Payment: The amount you put down upfront affects your loan amount and monthly payments. A larger down payment can reduce interest costs.
- Loan Term: Choose the loan term (e.g., 36, 48, 60 months) carefully, as it impacts both your monthly payments and the total interest paid over the life of the loan.
4. Loan Repayment Options
- Will You Consider Early Loan Repayment? Decide if you plan to repay the loan before the scheduled term ends.
- What Month Will You Pay It Off? Specify the expected month if you intend to make an early loan payoff. Some lenders may charge prepayment penalties.
5. Information By Financing Options And Related Factors
- Dealer Financing: Consider the dealership’s financing options, but be aware of potentially higher interest rates.
- Bank Financing: Explore loans from banks or credit unions, which may offer competitive interest rates.
- Line of Credit (LOC) Financing: If you have a pre-existing line of credit, assess whether using it for purchase is cost-effective. Personal lines of credit tend to have lower interest rates. A common benefit of using your LOC financing is that you can pay only the interest, if required, without paying the principal. This provides flexibility if you have any other financial commitments to pay.
- Interest Rate: This is the starting point of your comparison across the different lenders’ interest rates, as even a slight difference can significantly affect the total interest paid. However, the following items will impact your combined loan interest and fees.
- Financing Setup Fee: Some lenders may charge an initial setup fee that adds to your loan cost. This may need clarification, so ask or read through the paperwork.
- Early Loan Payout Fee: Check if the lender imposes penalties for paying off the loan early. Consider how this might affect your plans. This is more common with dealership and bank loans. A line of credit is usually an open loan, allowing a payback at any time.
You can choose the most cost-effective auto loan option for your vehicle purchase by carefully evaluating these factors. It’s essential to calculate the total cost of ownership over the life of the loan to determine which option best suits your financial situation.