Before you purchase your next car, take a moment to decide what monthly car payment you can afford. First, you need to consider your lifestyle and budget. Most importantly, look at your situation and be realistic and honest. Car payments should be no more than 10-15% of your net income.
What’s in a monthly car payment?
Your monthly car loan payments depend on these factors:
The Loan Amount | based on the sale price of the car and minus a down payment or trade-in credit.
The Rate | The rate is often called the annual percentage rate or APR. The rate that you will receive will be based on your credit score and represents the cost of borrowing money. Lower credit scores generally result in higher rates.
The length of the loan | The length of the amount is also called the term. Additionally, some people take out a longer loan to get a more affordable car payment. On average, the term of a car loan is 36 months for used cars and 60 months for new cars.
What’s Your Credit Score?
Are you considering your next car, but you are not sure what the monthly payment will look like or how much you can afford? Certainly, the best way to estimate what your monthly payment might be is to check your credit and then use a car payment calculator. However, you won’t know exactly what rate and loan amount you qualify for until you apply for a car loan.
Checking your credit gives you a sense of what auto loan interest rates will be. Make sure you know where your credit score stands and what factors are contributing to your score. Maybe you need to work on your credit and possibly remove a few items that can boost your score. Visit AnnualCreditReport.com and get a free copy of your credit report every 12 months from each credit reporting company. AnnualCreditReport.com is the official site to get your free annual credit reports. This right is guaranteed by Federal law. You can verify this is the official site by visiting the CFPB’s website.
Additionally, with a lot of first-time car buyers, you may not have bad credit, but you may not have enough credit. With Pearl Hawaii Federal Credit Union’s Credit Create, we will help you establish a credit history and help you with your auto loan.
Car Payment Calculator*
These car payments calculators will help you visualize how changes to your interest rate, down payment, trade-in value, and vehicle price affect your loan. Take some time to experiment with different values to find an auto loan setup that works best for your lifestyle and that does not break your budget.
While considering this, sometimes your monthly car payment may be more important than the total cost of the car. With our car payment calculators, you can quickly determine how much you will owe and what you can afford. A car payment has to fit in your monthly budget and your lifestyle’s needs.
Input the price you think you’ll pay for the car. To estimate a new car’s price, start with the vehicle’s sticker price (also called the MSRP or manufacturer’s recommended retail price). Remember to include any additional items you may purchase. For example, extended warranty, tinting, or upgrades.
For used cars, estimating the sale price is a bit trickier. You can start with the seller’s asking price, but you may be able to negotiate that lower. To get an idea of a fair price, use Autosmart to search an extensive database and compare trims, photos, and reviews for every make and model, so you can find the car that fits your life.
RATE
There are several ways to determine an interest rate to enter. If you get prequalified or preapproved for a loan, simply enter the rate you are offered. Otherwise, you can use the current advertised rates.
TERM
Term is the number of months that you will borrow the money for. Enter the loan term, or the length of time you have to pay off the loan. Car loans are usually in 12-month increments. Pearl Hawaii offers terms for 24, 36, 48, 60, 72 84, or 96 months for new vehicles and up to 84 months for used vehicles.
ALSO CONSIDER…
Down payment
Remember to calculate the total amount of cash you plan to put toward the car. Not everyone makes a down payment, but putting any amount down will help lower what you finance and the total cost of the loan.
Trade-in value
Also calculate the trade-in value of your existing vehicle. You can use Autosmart for appraisals and pricing help.
Amount owed on trade-in
If you’re still paying on a loan for the vehicle you plan to trade in, remember to include this in the calculation. The payoff amount can be provided by your lender.
Using our car payment tools and auto loan calculator to calculate your monthly payment before going to the dealership can boost your negotiating power and help you choose the best loan for your budget. Overall, auto loan and car payment calculators are useful tools to assist you with educating yourself before visiting us or walking into a dealership. While you cannot calculate your exact monthly car payment, you can gain a good estimate and help you compare auto loan offers with confidence. First, we suggest getting pre-approved so you know your shopping power. Contact our loan staff at 808.737.4328 or email our loan team if you have questions or need assistance. You can also apply now to get started and a loan officer will contact you shortly.
Overall…
Typically, car loans commonly range from two to six years. Pearl Hawaii does offer up to eight-year terms on certain vehicles. Overall, when you choose a longer-term, you will be paying more interest. When you meet with a Pearl Hawaii loan officer, you will be able to see how much interest you will pay during the life of the loan and compare different Pearl Hawaii’s different auto loan products to see what will better fit your personal situation.
*Information from our car payment calculators is for example purposes. Our interactive calculators are educational tools. We cannot and do not guarantee their accuracy in regard to your individual circumstances. While a calculator can be a useful tool, all examples are hypothetical and are for educational purposes. For honest and accurate measures, we encourage you to meet with a Pearl Hawaii Federal Credit Union loan officer for accurate car payment information. Contact our loan staff at 808.737.4328 or email our loan team to get started.
UPGRADE YOU.
Building trust, nurturing dreams, inspiring hope. From home or car loans to Hawaii’s most innovative banking services, Pearl Hawaii is committed to you. Bank at any of our Oahu locations in Waipahu, Ewa Beach, Waianae, Honolulu, Pearl Harbor, or near the Airport. Additionally, you can bank using PHFCUOnline just like one of our branches. To contact us, call us at 808.737.4328, toll-free at 800.987.5583, or email us at MyFamily@phfcu.com.
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