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There may come a time when you find yourself in desperate need of a newer or bigger vehicle, but you are in no financial position to buy one outright. Luckily, there’s always the option of applying for—and hopefully receiving—a car loan. And, using a car loan calculator in British Columbia is an easy way to start figuring out how much you can afford to spend on a new vehicle and how much your monthly payments will be.
No matter if you are looking for a new or a used car loan, using this calculator should be your first step.
Aren’t Car Loan Payments And Terms Hard To Figure Out?
All the terms that go with car loans can sometimes be difficult to understand. After all, there are a lot of factors that go into figuring out how much of a car loan you can get and how and when to pay it back. So, it’s lucky that auto finance calculators can do all the work for you and that they are very easy to use.
How Does An Auto Loan Calculator Work?
There are a few different numbers to plug in when using a car loan calculator. Once you have those values, you’ll be able to see what types of payments you’ll be looking at and the amount of time you’ll have to pay it back. You’ll be able to enter a few different numbers to get various options that can help you better choose your new or used auto financing.
What Do I Need To Know Before I Use A Car Loan Calculator In BC?
You may not have the exact numbers you need, but a car loan calculator will still give you a general ballpark of what you’ll be looking at. And, know that by using our online auto loan calculator, you’re not committing to anything. This is just an easy way to start your planning.
Here’s a breakdown of what numbers you’ll need to know to use the car loan calculator:
Purchase Price.
This is whatever price you and the car dealership have agreed upon for the vehicle you wish to purchase. If you happen to be eligible for any rebates or extra savings, subtract these numbers from the original price to make your new purchase price.
Interest Rate.
This is the rate you’ll have to pay for the privilege of getting an auto loan in BC. You’ll want to try to get the lowest interest rate possible. The lower the interest rate, generally, the lower the total cost to you will be. For example, if you get a 3% interest rate, this means you’ll be paying 3% of the vehicle’s purchase price in interest for every year it takes to pay your loan off. Talk to your lender to find out the interest rate you’ll be given on your loan. You may have a few options available to you so you can punch the different numbers into the calculator to find the best deal for you.
If you are still in the beginning stages and haven’t finalized anything with your lender, pick an interest rate which would be average for someone with your credit score. This may not give you definite numbers, but you’ll be able to see a ballpark figure for what your payments will be.
Down Payment.
If you’re looking at getting a car loan, you likely don’t have enough money to purchase a vehicle outright. However, if you have any money at all, you should put that money down against the vehicle purchase. Even if it’s only 5% of the purchase price, that’s enough to help lower both your total price and loan term.
Trade-In Value.
If you currently have a vehicle, you’ll likely want to try to trade it in. The money you’ll get from your old vehicle will help to offset some of the purchase price, or it can work as a down payment. If the vehicle you want to buy is $20,000, but the dealership is willing to give you $5,000 for your current vehicle, that only leaves you with $15,000 to pay.
Owed-On Trade.
If you are still paying off the car you currently own—the one you’ll be trading in—the amount you have left to pay will need to be factored in as well. So, basically, if you still owe $2000 on your current car and you need $10,000 for your new vehicle, you’ll really need to be looking at obtaining an auto loan for $12,000 to cover all the costs you will then owe.
Sales Tax.
In BC, we’re looking at 12% currently. So, know that this will be added to the purchase price as well.
Payment Frequency.
Often, you’ll be given the option to pay off your loan in either monthly or bi-weekly payments. And, occasionally, lenders will allow you to pay weekly.
If you can swing it, paying bi-weekly allows you to make more payments per year by splitting your monthly payment in half. But, because of the way weeks fall into months, you’ll technically be making the equivalent of one extra payment annually. And, over time, this allows you to pay off your loan faster.
Loan Term.
This is how long you’ll have to pay back your entire loan. Remember that the longer you take to pay, the more interest you will have to pay. However, you don’t want to take on a larger payment than you can handle every month to simply save a bit of money.
Luckily, with the car loan calculator, you can plug your numbers in and figure out your monthly payments based on how long you want to pay back your loan. Choose a few different terms and find a monthly payment that fits into your budget best.
Contact LendingArch!
Now that you can see how easy and useful it is to figure out your car finance payments, head over to our handy car loan calculator and have fun playing with the numbers to find the best options for you.
And, be sure to contact LendingArch to see the many car loan options you have available to you in BC and all across Canada. It’s quick and easy to apply.
