Everyone has seen those payment calculators. But do you really know what you need to get the best answer for your situation? I didn’t really. Every dealer website has one and I’m thankful that Kim’s No Bull has 2 different ones: calculate your buying power and monthly payment.
How important is each section of the calculator?
When calculating your buying power, you need to know a couple things: what is your comfortable monthly payment, do you have a down payment or trade in, how long do you want your term, and what is your interest rate. The first 3 are things you can easily come up with but the last depends on your credit. Excellent credit could start your interest rate at 0% but normally averages around 2.38%. The interest rate is important because it could change how much you could afford.
If you are anything like me, you may have applied for a loan before heading out. Places like Capital One is a good place to start. Where ever you applied will have the information for an interest rate so you can start with that. Remember, you can use your pre-approval or have the dealership find you a better rate.
Once all the information is figured out, it’s simple!
Say you can afford a $450 payment per month. You have a down payment of $1,000 and also have a trade in. The trade in is worth $5,000 once it’s loan is paid off. You want a 72-month loan and you qualify for 1.9% interest rate. Punch all that in and you could purchase a car, truck or SUV for up to $36,599.00.
I love the fact that you are able to find out as much as possible before you go into picking out the car for you. Use what you have to be prepared to be successful and love your new car.