More often, the longer the loan is, the lower the rate and more advantageous from an economic point of view. However, the majority of fixed rate loans are more expensive than variable rates. The rate does not fluctuate, which makes the planification of your budget easier. This rate gives you the assurance of equal payments throughout your agreement. The main criterias are your financial situation, solvency, current promotions, and your ability to take risks based on your car loan payment fluctuation. It is strongly recommended that you shop around for the best loan that fit your needs. Most buyers of new cars or used vehicles, whether personally or for a business, often need a car loan. The monthly payment = Loan amount x Car loan rate / Number of payments in the year 1 - (1 + Car loan rate / Number of payments in the year) -Number of payments * Number of years of the term Exampleįor example, take a car loan of $25,000, an interest rate of 3% (0.03), a term of 48 months (4 years) and monthly payments (12 payments per year).Ģ5 000 x 0.03 / 12 1 - (1 + 0.03 / 12) -12 * 4 = 62.50 1 - (1,0025) -48 = 62.50 1 - 0.887053263 = 62.50 0,112946737 = 553,36$/month The car loan This rate can be fixed, variable, increasing, decreasing, etc. Interest rate : This car loan rate is the standard rate offered by your dealership, seller or your bank, credit union or other financial institution.Down payment : The amount of money you invest in the purchase of the car to reduce the amount of the loan.Trade-in vehicle balance : The remaining amount (balance) or the amount you still have to pay for you current vehicle toward the purchase of another one.Trade-in vehicle value : The amount offered for the trade-in vehicle or using the value of your actual car to buy another one.Car amount : The purchase amount of the car (automobile, truck or other).The calculation of car loan payments is done using the following variables

Auto loan calc with tax