Auto Loan Comparison Calculator

How to Use the Auto Loan Comparison Calculator

1. Enter vehicle details for each offer: purchase price, down payment, trade-in value, taxes, and fees.
2. Add financing terms: APR (annual percentage rate) and loan term (months).
3. Include incentives like cash rebates (if any).
4. Compare results: monthly payment, total interest paid, and total cost of the loan.

Kudos Tip: Keep the price, taxes, and fees the same across offers if you’re comparing lenders on the same car. Change only APR, term, and incentives.

What Each Input Means

• Purchase price: Sticker price of the car before taxes and fees.
• Down payment: Cash you’re putting in upfront; lowers the amount you finance.
• Trade-in value: What you’ll get for your old car; often reduces the taxable amount (varies by location).
• Taxes & fees: Sales tax, title, registration, doc fees. If you finance these, they increase your loan amount.
• Rebate/Incentive: Dealer or manufacturer cash that reduces the price (and sometimes the taxable amount).
• APR: The yearly cost of borrowing, including most lender charges.
• Term (months): How long you’ll pay—longer terms shrink the monthly but usually increase total interest.

Kudos Tip: APR beats “interest rate only” because it bakes in more of the loan costs. When comparing lenders, compare APR to APR.

Example: Same Car, Two Lenders

Assumptions (for illustration):
Price $30,000, Down $3,000, Trade-in $0, Tax 8%, Fees $600 → Loan amount ≈ $30,000

Offer A: APR 6.5%, 60 months

• Monthly ≈ $586.98
• Total interest ≈ $5,219
• Total cost ≈ $35,219

Offer B: APR 4.9%, 48 months

• Monthly ≈ $689.52
• Total interest ≈ $3,097
• Total cost ≈ $33,097

Takeaway: Offer B costs more per month but saves ~$2,122 in total interest and lowers total cost.

Rebate vs. Low APR: Which Is Cheaper?

Run both scenarios in the calculator to see which wins.

Scenario 1 – Low APR wins

• No rebate, 1.9% APR for 60 months → Total cost ≈ $31,471
• $3,000 rebate, 6.9% APR for 60 months → Total cost ≈ $31,717
  Result: Low APR edges out the rebate.

Scenario 2 – Big rebate wins

• No rebate, 1.9% APR for 60 months → Total cost ≈ $31,471
• $5,000 rebate, 6.9% APR for 60 months → Total cost ≈ $29,157
  Result: The larger rebate crushes total cost.

Kudos Tip: Bigger rebates help more when: (a) the rebate is substantial, (b) terms are longer, or (c) APR differences are small. Always test both.

What’s a “Good” APR and Term?

• APR: Depends on credit, vehicle (new vs. used), market rates, and promotions.
• Term: 36–60 months is common. Going longer can lower your monthly but often raises total interest and the risk of being upside-down (owing more than the car is worth).

Kudos Tip: If you can comfortably afford a shorter term, you’ll usually pay less interest and be equity-positive sooner.

Tips to Lower Your Payment and Total Cost

• Boost your credit before applying (on-time payments, lower card balances).
• Increase your down payment or apply a trade-in to shrink the loan.
• Shop multiple lenders (banks, credit unions, online lenders, dealer financing).
• Pick the shortest term you can comfortably handle.
• Avoid add-ons rolled into the loan unless you truly need them.
• Refinance later if rates drop or your credit improves.

Common Mistakes to Avoid

• Comparing monthly payments without checking total cost.
• Financing unnecessary extras (warranty, add-ons) that balloon your loan.
• Ignoring taxes and fees—these can add thousands if financed.
• Stretching the term just to “make it fit,” risking negative equity.

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Frequently asked questions