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.
|
SALE PRICE |
16,565.06 |
|
DOC FEE |
250.00 |
|
SALES TAX @ 6.25% |
1,050.94 |
|
TITLE/FILING |
35.00 |
|
TOTAL |
17,901.00 |
|
DOWNPAYMENT |
2,000.00 |
|
AMOUNT FINANCED |
15,901.00 |
|
MONTHS |
60 |
|
INTEREST RATE |
4.99% |
|
MONTHLY PAYMENT |
300.00 |
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.
