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Calculate your vehicle payment                                                                                                            

 

All payments start with knowing the TRUE TOTAL cost.  This is a portion most people miss.  The true total cost is the cost of the car + options + destination fee times the state’s sales tax, plus title and license fees.  Destination fees typically range between $300 to $600.  Title and license fees typically range between 1 to 1.5% of the purchase price.

 

 

Calculate the total Ccst

 

Let's say that the car is $22,500 and the options total $550.  To protect us from surprises we will use the higher number for destination fees of $600 and 1.5% for Title and licensing.  We will use 6% as our State Sales Tax.

 

Purchase price is: $22,500 + $550 + $600 = $23,650

Sales Tax is: $23,650 x .06 = $1,419

Title and licensing: $23,650 x .015 = $354.75 so say $350.

Total Cost: $23,650 + $1,419 + $350 = $25,419.

 

TRUE TOTAL COST = $25,419

 

Calculate Purchased Payments

 

To calculate the monthly payment of a purchase vehicle one must decide on how long the payments will be spread over. Car loans typically are spread over 24, 36, 48 or 60 month periods.  The payments are also affected by the interest rate you can obtain on the loan.

 

The equation for calculating the payments is:

 

 

Where:

C = Total Cost

I = Interest rate of the loan

M = Number of months the loan is over.

 

For example, a 4 year (48 month) loan for our $25,419 total vehicle cost at 5% interest would look like this:

 

The monthly payment for this $25,419 vehicle would be $585.38.

 

The Financial Swami has built a excel calculator that you can just plug your 3 numbers into it to calculate the monthly payment.

 

Monthly car payment calculator when purchasing

 

 

Caluclate Lease Payments

 

To calculate the monthly lease payment of a vehicle one must decide on how long you want to lease the vehicle for. Car leases typically are spread over 24, 36, 48 or 60 month periods.  The payments are also affected by the interest rate you can obtain.  Interest rates for leases are called the "money Factor".  Another variable that affects the lease payment is the residual value of the vehicle at the time you return it to the owner.  When you lease a vehicle, you don't own it, you are leasing it from an owner and you are making monthly payments for the time the vehicle is in your possession.  The residual value depends on the age of the vehicle, its condition and the miles the vehicle has accumilated.  The best way to estimate the residual value of a vehicle is to use Kelly Blue Book.  They are the most referenced resource for vehicle value.  The service is free but you have to sign up.

 

Calculating the lease payment has many steps.  The best way to get to the end result is to use our excel calculator.  Download it for free and just plug the numbers in.

 

Monthly car payment calculator when leasing