subject: New Car Payment – How to Calculate the Exact Cost [print this page] New Car Payment How to Calculate the Exact Cost
It is all too easy to make the mistake of approximating how much money you need for a new car based on the cost of the car alone. By using this figure to determine what you can afford for a new car, you will be in for quite an un-welcomed surprise. There are several other factors involved:
Down Payment
This amount can vary tremendously depending on the type of payment plan you choose, the dealership, your credit history, and current incentives. Although you maybe be able to find a deal with no, or very little money down, count on somewhere between 15 and 20 percent of the purchase price.
Monthly Financing Cost
Determine the amount you will be paying each month for financing. This calculation is quite simple. Ask your lender for the total amount of interest you will be paying on the vehicle. Divide this cost by the number of car payments you will make (36 for a three-year loan, 48 for a four-year loan, etc.). This will give you your monthly financing cost.
Insurance Costs
Ask your insurance agent to give you the exact figures for the particular car in which you are interested. This is vitally important as sometimes you will be paying more for insurance than you are for your car payments.
Fuel, Maintenance, and Repair
You will only be able to approximate the amount you will be spending on gas, regular maintenance, and any necessary repairs that come along; but this is a necessary step. Consumer and automobile websites can give you a good indication of the typical repair costs and gas consumption numbers for the car you are considering.
When you add these figures together, you now have a more accurate picture of what your new car will actually cost you.
