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Auto Loan Comparison Formula:
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The Auto Loan Comparison Calculator helps you determine the total cost of an auto loan by calculating the sum of all payments plus any additional fees. This allows for easy comparison between different loan offers.
The calculator uses the formula:
Where:
Explanation: The equation calculates the sum of all monthly payments over the loan term plus any upfront or additional fees to determine the true total cost of the loan.
Details: Comparing total loan costs helps identify the most economical financing option, as loans with lower monthly payments but longer terms may actually cost more in the long run.
Tips: Enter the monthly payment amount in USD, loan term in months (typically 24-84 months), and any additional fees. All values must be positive numbers.
Q1: Why compare total cost instead of just monthly payments?
A: Monthly payments don't show the full picture - a longer term loan might have lower payments but cost significantly more overall.
Q2: What fees should be included?
A: Include all loan-related fees: origination fees, documentation fees, and any other mandatory charges.
Q3: Should I include the down payment?
A: No, the down payment reduces the amount financed but isn't part of the loan cost calculation.
Q4: Does this include interest?
A: Yes, the monthly payment amount already includes principal and interest.
Q5: How accurate is this calculation?
A: It provides an exact total of payments and fees, but doesn't account for potential early payoff savings or penalties.