There are a variety of factors that go into determining your monthly payment, and it is important that you have a good understanding of each of them. Knowing how a car payment is calculated can make it easier to determine if you have gotten a good deal on a vehicle from a Naperville Mazda dealership.
What Is the Loan’s Term?
To calculate the principal portion of a vehicle payment, simply divide the price of the car by the number of payments that you’ll be making. Let’s say that you’re going to pay for a $10,000 vehicle over a period of 72 months. This means that you would divide $10,000 by 72 to determine the principal portion of your car payment. In this scenario, the payment would be about $138.88.
Don’t Forget the Interest
There is a good chance that you’ll be paying interest to the lender for the right to finance a car purchase. If you have good credit, you can expect to pay an interest rate of 5% or less. Let’s assume that you were paying a rate of 5% on a loan balance of $10,000 that is being paid off over 72 months. With those figures, your monthly payment would be $161.05.
Are You Getting a Good Deal?
The only way to know if you’re getting a good deal is if you paid market value for the car. Furthermore, you want to make sure that you have shopped around for the lowest interest rate before coming to a Naperville Mazda dealership. This will help you verify that you aren’t spending more than you need to on a new or used vehicle.
If you are looking for a new or used Mazda, come to Hawk Mazda to speak with a sales associate. You can also contact us online at HawkMazda.com.
