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How to use a car payment calculator to estimate your next auto loan

So, you want to use a car payment calculator to help estimate your next auto loan? Look no further than First Merchants Bank’s auto loan calculators. These handy tools help you put the best foot forward when shopping for your next vehicle purchase. 

First, what is a car loan payment calculator, and how can it help you make the best decision when it comes to selecting your next car, truck, or SUV? Like any major purchase, such as financing a home or investing in a new venture, it’s critical to do your research before you go shopping for a car – including how to calculate a car payment. That’s where our payment calculator comes in. 

What is a car payment calculator?

Loan payment calculators help you map out your budget – from down payment amount to APR  to insurance – so that when you arrive at the car dealership you know exactly what to expect and how much you want to pay.  

What to know about estimating a car loan

There are several variables that can impact the price of a new vehicle, such as the overall purchase price, dealer incentives, the length of your loan term, interest rate, and down payment, among others. You can estimate many of these items ahead of time based on your budget, the type of car you are looking for, and current market rates.

At First Merchants, we believe our customers should be well-prepared for every major financial venture, which is why our auto payment calculator helps you tally up each of these factors, and more, to give you an accurate picture of your financial future.

Using a car payment calculator

Once you’ve sketched out a tentative budget, it’s time to use an auto loan payment calculator to help determine your loan payment. Check out one of First Merchants car payment calculators, and see how easy they are to use. You can even figure out how much car you can afford!

You’ll need to enter the following information, if available: 

  • Vehicle purchase price: The price of the vehicle you want to purchase including extras and upgrades.
  • Cash rebates or cash back: Any incentives offered by the dealership for buying a vehicle.
  • Sales tax rate: The tax rate you’ll pay for your new vehicle.
  • Trade-in value: What you expect the dealer will pay for a trade-in vehicle. If you don’t have a trade-in vehicle, set this field to $0.
  • Amount owed on trade-in: The balance owed on your trade-in vehicle, if applicable.
  • Loan term: The number of months you will have to repay your loan.
  • Interest rate: This is the rate at which interest will accrue on your new vehicle. Interest rates vary based on your credit score, purchase price, loan term, and down payment.
  • Down payment: The amount of cash you can pay upfront for your vehicle.
In addition to providing a sense of how much your monthly payments will be, be aware that your total out-of-pocket expenses could be slightly different. Our vehicle loan payment calculator accounts for most variables, but some expenses like local taxes, registration, and dealer fees – which vary based on the seller – can add to your total cost.

Buying a car

Consider securing a loan before you start shopping for your new vehicle. After calculating your car payment to establish a budget range, we recommend arranging financing before you go for a test drive to prevent you from overpaying and spending more than your budget allows. Securing a loan ahead of time also shows the sales team you’re an informed buyer and allows you to take charge in negotiations.

While it can be difficult to know exactly how much you’ll pay for a car loan, as the final numbers will be determined by your specific loan, following this helpful guide and using a tool such as a loan payment calculator can help give you a solid foundation – after all, knowledge is power. 
Now you’re ready to head to the dealership and seal the deal!

Questions? Want to learn more? Give First Merchants a call at 1.800.205.3464 or visit one of our banking centers. Learn more about our vehicle loans