Car Loan Payments - Financing Scenarios

Small changes in the terms of a financing contract on a new purchase can provide huge savings in time and money. The following car loan example illustrates the benefits of running several financing scenarios before purchase, so the optimized choice is made.

Typically, people pre-determine the amount they can affort each month for their car payment. You can use Debt Reduction Calculator to change the interest rate and loan length, while keeping the monthly payment constant, with the objective to minimize overall costs.

Small changes in the terms of a financing contract on a new purchase can provide huge savings in time and money. The following car loan example illustrates the benefits of running several financing scenarios before purchase, so the optimized choice is made.

Lower payments, longer loan | |||||

% Interest | Payment | Years | Principal | Interest | |

3.99% | $199 | 6 | $12,723 | $1,605 | |

7.99% | $199 | 6 | $11,353 | $2,975 | |

9.99% | $199 | 6 | $10,745 | $3,583 | |

14.99% | $199 | 6 | $9,414 | $4,914 | |

Most you can finance under these terms is $12,723 |

Higher payments, shorter loan | |||||

% Interest | Payment | Years | Principal | Interest | |

3.99% | $349 | 4 | $15,460 | $1,292 | |

7.99% | $349 | 4 | $14,708 | $2,525 | |

9.99% | $349 | 4 | $14,157 | $3,075 | |

14.99% | $349 | 4 | $12,903 | $4,330 | |

Most you can finance under these terms is $15,460 |

Medium payments, medium loan | |||||

% Interest | Payment | Years | Principal | Interest | |

3.99% | $274 | 5 | $14,883 | $1,558 | |

7.99% | $274 | 5 | $13,516 | $2,925 | |

9.99% | $274 | 5 | $12,899 | $3,541 | |

14.99% | $274 | 5 | $11,520 | $4,920 | |

Most you can finance under these terms is $14,883 |

Higher payments, longer loan | |||||

% Interest | Payment | Years | Principal | Interest | |

3.99% | $349 | 6 | $22,314 | $2,814 | |

7.99% | $349 | 6 | $19,914 | $5,217 | |

9.99% | $349 | 6 | $18,845 | $6,284 | |

14.99% | $349 | 6 | $16,509 | $8,619 | |

Most you can finance under these terms is $22,314 |

Different payments, same interest rate | |||||

% Interest | Payment | Years | Principal | Interest | |

4.99% | $199 | 6 | $12,360 | $1,968 | |

4.99% | $249 | 6 | $15,467 | $2,463 | |

4.99% | $299 | 6 | $18,573 | $2,957 | |

4.99% | $349 | 6 | $21,677 | $3,451 | |

4.99% | $399 | 6 | $24,783 | $3,946 | |

4.99% | $499 | 6 | $30,993 | $4,935 | |

Each $50 payment increase buys $3,100 more car |

Typically, people pre-determine the amount they can affort each month for their car payment. You can use Debt Reduction Calculator to change the interest rate and loan length, while keeping the monthly payment constant, with the objective to minimize overall costs.