Owner Financing Interest Rate Calculator

by

Car Loan Affordability Calculator

36 Months (3 Years) 48 Months (4 Years) 60 Months (5 Years) 72 Months (6 Years) 84 Months (7 Years)

Estimated Vehicle Price: $0

Total Loan Amount:
$0
Total Interest:
$0
Estimated Sales Tax:
$0
Total Cost of Car:
$0
function calculateCarAffordability() { var budget = parseFloat(document.getElementById('monthlyBudget').value); var months = parseFloat(document.getElementById('loanTerm').value); var rate = parseFloat(document.getElementById('interestRate').value) / 100 / 12; var down = parseFloat(document.getElementById('downPayment').value) || 0; var trade = parseFloat(document.getElementById('tradeIn').value) || 0; var taxRate = parseFloat(document.getElementById('salesTax').value) / 100; if (isNaN(budget) || isNaN(rate) || isNaN(months) || budget <= 0) { alert("Please enter valid numbers for budget, interest rate, and term."); return; } var loanAmount; if (rate === 0) { loanAmount = budget * months; } else { loanAmount = budget * (1 – Math.pow(1 + rate, -months)) / rate; } var purchasePriceBeforeTax = (loanAmount + down + trade) / (1 + taxRate); var totalInterest = (budget * months) – loanAmount; var estimatedTax = purchasePriceBeforeTax * taxRate; var totalCost = (budget * months) + down + trade; document.getElementById('maxVehiclePrice').innerHTML = '$' + purchasePriceBeforeTax.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('totalLoan').innerHTML = '$' + loanAmount.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('totalInterest').innerHTML = '$' + totalInterest.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('taxAmount').innerHTML = '$' + estimatedTax.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('totalOutofPocket').innerHTML = '$' + totalCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('affordabilityResult').style.display = 'block'; }

How to Use the Car Affordability Calculator

Before stepping onto a dealership lot, it's vital to know exactly what vehicle price range fits your financial reality. This calculator reverses the standard loan math to tell you the maximum sticker price you should look for based on your desired monthly payment.

Key Factors in Car Affordability

  • Monthly Budget: Experts recommend keeping total transportation costs (loan, insurance, fuel) under 15% of your take-home pay.
  • Interest Rate (APR): Your credit score heavily influences this. Higher scores secure lower rates, allowing you to afford a more expensive car for the same monthly payment.
  • Loan Term: While 72 or 84-month loans lower your monthly payment, they significantly increase the total interest paid and increase the risk of being "underwater" on the loan.
  • The Impact of Taxes: Sales tax is often overlooked. Our calculator accounts for this by deducting the estimated tax from your total financing power to show a realistic sticker price.

Realistic Example

Imagine you have $500 per month to spend on a car loan. You have a $2,000 down payment and a $3,000 trade-in. With a 60-month term at 5.5% interest and 7% sales tax:

  1. The calculator determines you can finance a loan of approximately $26,200.
  2. Adding your $5,000 in equity (down payment + trade) gives you $31,200 in total buying power.
  3. After adjusting for 7% sales tax, your maximum purchase price is $29,158.

Budgeting Tips for Car Buyers

Don't forget the "hidden" costs of ownership. A $500 monthly payment is just the start. You should also budget for:

  • Insurance: New cars often require full coverage, which is more expensive than liability only.
  • Maintenance: European luxury brands generally have higher service costs than domestic or Japanese economy brands.
  • Registration Fees: Annual tag and title fees vary wildly by state.

Leave a Comment