Car Loans Calculator
It’s no secret that the interest rates charged on car loans are often higher than housing mortgages. Entering your numbers into a simple car loans calculator can show you how much you will pay at their rates, but what happens to your repayments if you enter in an interest rate that is as low as regular rates?
When you apply for finance through a car dealer, they often ‘load’ the interest rate higher than the actual rate they’re receiving from the lender. This is because many lenders offer car dealerships the opportunity to earn income from you. The car dealer’s finance representative simply jumps online and using a regular car loans calculator they find out how much they’re being charged for your finance and they just add a little bit to each payment you make.
This interest rate loading is extra profit for the car dealer. What they don’t tell you is that you don’t have to accept those rates.
Before you begin shopping for a new car, take some time to use a car loans calculator for yourself. Call a few lenders or banks, or perhaps visit a few banks' websites and find out what interest rate you’d be eligible for.
Compare the difference in repayments and loan terms on a car loans calculator and then write down or print out your results as reference for later. That way when it comes time to apply for your car finance, you’ll have plenty of ammunition to use for negotiating.
When you see the car dealer’s finance person entering numbers into a car loans calculator, ask what the lowest rate is that they can offer. The figure you hear first will not be the lowest rate they have. After all, you would already have spent time researching how low some banks can go, so you’ll know if they’ve added some profit-margin onto the figure. This gives you the upper hand in negotiations.
Simply enter in the amount you’re paying now and the interest rate you’re currently being charged into a car loans calculator, and then see how much lower your monthly repayments would be if you refinanced over to a new lender with a lower interest rate.
Always remember that you’re dealing with your own money when it comes to car loans. You’re the one who has to go to work to pay for it, so you should be able to negotiate for something that works for you. Make good use of a car loans calculator to make sure you always have the upper hand when it’s time to negotiate and you could be saving thousands of dollars.
Please also check out my other guide on auto finance calculator and online car loans
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