Before getting a car loan it is important to calculate its loan value or New Car Price
. This helps in preparation of the money to finance the loan. Preparation of the needed amount for a car loan enables you to avoid extra expenses on interests and shortens the loan period.
Proper calculation of the car's loan value is easily accomplished by following the four steps below.
First Step: Research on the Car's Selling Price
The selling price of the car influences its loan value. Consulting reliable car dealers on the vehicle's latest price in the market helps you calculate the loan value based on it. There are websites such as edmunds.com that shows all of the car prices.
Second Step: Consider Tax Sales and Registration of Title
The current price of your car includes the sales tax and the title's registration fees. This affects the loan value of the vehicle. However, these are not uniform. Sales tax and registration fees vary in every state.
States such as Virginia and Oregon imposes the lowest tax. The state of Nevada on the other hand has the imposes that highest tax. It would be practical to loan a car in nearby with lower sales tax than in your own state.
Third Step: Take Note of the Rebates
Rebate goes with a car loan. These are implemented to help dealers clear their inventory. Good rebates could shorten your car loan. This is the primary reason you should take of it.
In addition to this, high rebates are placed on popular cars. Dealers place high rebates on them to sell those cars quickly. A good rebate could entirely turn your loan into a budget friendly one.
Fourth Step: Don't take the down payment amount for granted
This should not be ignored in calculating the car's loan value. The down payment shortens the loan period and lowers the monthly installment. It also protects your car from depreciating.
The most advisable amount of down payment is 20% of the car's total value or maybe higher. Lesser down or nothing at all forces you to pay more than the real worth of the car.