
After careful consideration, you have $300 per month to finance your next car. How much of a car can you afford? Quite often, customers contact us expecting to finance a $30,000 vehicle for $300/mo. While that would be a very good deal, it just isn’t realistic. Do the math. Sixty payments of $300 per month totals $18,000 before taxes, interest, and fees. You would actually need more than $16,000 as a down payment to get to a $300 monthly payment on a $30,000 car. And most people are not prepared to put down that much money. While you may feel a bit disappointed or even cheated at the dealership, the truth is that a little homework will save you a some embarrassment.
For example, let’s say that you are looking for a $300 payment including all taxes, fees, discounts, etc. You have $2000 to put down and want a 60 month loan and a 4.99% interest rate. Assuming that your credit score is 730 or better, how much car can you afford to finance?
Using the USBank auto loan calculator, you’ll quickly find the answer.
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SALE PRICE
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16,565.06
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DOC FEE
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250.00
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SALES TAX @ 6.25%
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1,050.94
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TITLE/FILING
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35.00
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TOTAL
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17,901.00
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DOWNPAYMENT
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2,000.00
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AMOUNT FINANCED
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15,901.00
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MONTHS
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60
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INTEREST RATE
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4.99%
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MONTHLY PAYMENT
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300.00
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Is that different than you were thinking? If so, you may want to use the calculator before giving the evil eye to your local car salesman.