Tips for First-Time Car Buyers
First time buying a car? Learn useful tips for first time car buyers such as pre-qualifying for financing, choosing insurance, and understanding depreciation.
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Calculating your potential monthly car payment can clarify a vehicle’s affordability or help you decide how you want to set up your loan. When you go to a dealership, they often ask you how much you want to pay per month. This can distract you from the most important number, how much you end up borrowing and must repay over time to purchase the vehicle.
There are several important numbers that go into determining a monthly payment. An auto loan calculator can help you see that you have the option to change not only the total loan amount but also the loan term and your interest rate, giving you negotiating power. While not all fees and charges are included in the calculator, a ballpark estimate is still a valuable resource. To more accurately calculate your payments, consider applying for a pre-approved auto loan.
Use the sliders or enter your information manually. Moving your cursor over each column provides the annual total of your payments and your loan’s remaining balance. Filter the data by clicking on the data categories in the legend.
No one knows your financial situation better than you. Using our Car Payment calculator can help you assess the loan amount and monthly payments that fit your current circumstances and future goals. Equipped with this knowledge, you can shop for the right auto loan that you can then use to negotiate the best deal at the car dealership.
For used vehicles, try starting with a 48-month (4 year) term and increase or decrease the term to find a monthly payment you are comfortable with. Keep in mind that many lenders will not finance a used car for more than 72 months (a term usually reserved for new vehicle models).
For new vehicles, start with a 72-month term and adjust to see the impact on your payments. Some lenders will finance for as long as 96 months (8 years), but be aware that you will be “underwater” on the vehicle for longer.
The default rate in the calculator (8%) is a good place to start, but, if you want to be sure to have the most current rate in your calculation, check out our current vehicle loan rates. You can also apply with ITCU for a pre-approved auto loan and use the rate you qualified for in your calculations.
Vehicle sales tax rates vary by state, county and city level. Tax rates range from 4% to 10% if you want to try different amounts. To look up exact rates in your area, use this guide provided by F&I Tools, which includes resources for each state.
Get pre-approval for an auto loan from InTouch Credit Union, even if you haven’t decided on the car you want to buy. Sticking to a predetermined loan amount makes negotiating with the dealer easier!
