Car Payment Calculator

This screen allows you to determine the cost of your prospect's car purchase.

Click the calculate button to reveal the total payments and interest.

Which line does the car salesman focus on when talking with you about that shiny new car on the lot?  Yes, it’s the monthly note.  If you can afford to pay the monthly note, you are likely to buy the car.  The same devastating transfer of wealth takes place when one finances their car.  Interest payments on auto loans are not deductible.  It is understandable that few have enough resources to pay cash for their houses and must finance, but financing cars is avoidable.

Let’s assume that you financed a $25,000 car at 8% for 5 years.  At the end of 5 years, you will have paid the lending institution about $5,415 for the privilege of using their money.  During the sales process, very little attention is given to the amount of interest that will be paid over the course of the loan.  Salesmen generally do not focus on this next page when potential clients are looking at financing their next car.

This screen uses the TVM Payment function to calculate the monthly payment:

Interest must be converted to decimal and monthly by divided by 1200.  The 1200 is 12 for monthly conversion and 100 for decimal conversion.

Monthly Payment = Pmt(Monthly Interest Rate, Months, -Amount of car , 0, 0)

The two zeros in the above equation stand for zero future value and end of the period payments respectfully.

The total payment is found by multiplying the number of payments by the amount of each payment:

Total Payments = Number of months * Monthly Payment

The interest is found by subtracting the cost of the car from the total paid.

Total Interest = Total Payments - Cost of Car