Quick Payment and Interest Calculations for Car Buying

With so many good financing offers out there, thought I would throw a quick reference guide together that you could print out and take to the dealer. Here goes:

1. (MF) money factor to approximate percentage rate: Multiply lease factor by 6,400.

2. Low APR financing monthly payment per $1,000 financed:

72-months 0% APR – $13.89 per $1,000 financed.
60-months 0% APR – $16.67 per $1,000 financed.
48-months 0% APR – $20.83 per $1,000 financed.
36-months 0% APR – $27.78 per $1,000 financed.

72-months 1.9% APR – $14.71 per $1,000 financed.
60-months 1.9% APR – $17.48 per $1,000 financed.
48-months 1.9% APR – $21.65 per $1,000 financed.
36-months 1.9% APR – $28.60 per $1,000 financed.

72-months 2.9% APR – $15.15 per $1,000 financed.
60-months 2.9% APR – $17.92 per $1,000 financed.
48-months 2.9% APR – $22.09 per $1,000 financed.
36-months 2.9% APR – $29.04 per $1,000 financed.

72-months 3.9% APR – $15.60 per $1,000 financed.
60-months 3.9% APR – $18.37 per $1,000 financed.
48-months 3.9% APR – $22.53 per $1,000 financed.
36-months 3.9% APR – $29.48 per $1,000 financed.

3. Here is one the car dealers don’t ever advertise: Total interest paid per $1,000 borrowed:

72-months 3.9% APR – $123.18 per $1,000 financed.
60-months 3.9% APR – $102.29 per $1,000 financed.
48-months 3.9% APR – $81.65 per $1,000 financed.
36-months 3.9% APR – $61.26 per $1,000 financed.

72-months 2.9% APR – $90.73 per $1,000 financed.
60-months 2.9% APR – $75.46 per $1,000 financed.
48-months 2.9% APR – $60.33 per $1,000 financed.
36-months 2.9% APR – $45.34 per $1,000 financed.

72-months 1.9% APR – $58.87 per $1,000 financed.
60-months 1.9% APR – $49.04 per $1,000 financed.
48-months 1.9% APR – $39.27 per $1,000 financed.
36-months 1.9% APR – $29.56 per $1,000 financed.

If your car costs $20,000 and you received 3.9% APR for 72-months you will have paid $2,463.60 in interest ($123.18 * 20).

Quick note on leases. Now that you know the total interest paid on the special financing terms, if you decided to lease on the spot with out doing your homework at least do this quick check before you sign any papers.

Multiply your total payments.
Add your down payment. (Should be zero or very small)
Add your trade in allowance.
Add any rebates and incentives.
Add in the residual value of the car. (Should be as high as possible)

This is you total price of the car. Does it make sense? Is it high compared to traditional financing? If you are doing a 36-month lease, look at what your total cost of the car would be using traditional financing using the charts above. For a car that costs $20,000 financed at 3.9% for 36 months you will pay a total of $21,225.26. If you do your calculation above for your lease and it turns out to be $25,550, you know you have a terrible deal.

Word of warning here. Just because the numbers match the good financing does not mean you have a good deal. If you are at the dealer and reading this and you don’t know why, then take the information down and tell the dealer you will call him with your acceptance within 24 hours. Go home and walk through the calculations on this site and determine if your lease meets the proper factors for being a good deal.

If you are arithmetic challenged, post the information in the discussion board or on any other car buying discussion board and wait for responses.

Never rush a lease unless you are already familiar with each factor before you go into the dealer.

Good luck!


3 comments

  1. ReplyMissy

    Can you add to this page the 0.9% monthly payments. I use this grid as a resource. thanks! going thru your site, enjoy what you have provided.

    Is this still a current updated site?


    1. Author
      ReplyBetterValue

      Sure,

      0.9%
      72-months 0.9% APR – $14.27 per $1,000 financed.
      60-months 0.9% APR – $17.05 per $1,000 financed.
      48-months 0.9% APR – $21.22 per $1,000 financed.
      36-months 0.9% APR – $28.16 per $1,000 financed.

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