What is car finance and how to use a car finance calculator
When buying a car, most of the time you won’t be able to do it with cash, which means that you will need financing. But what does the term financing mean? Simply put, to secure the full amount or a certain amount of funds from a secondary source to be able to purchase a car.
Financing options include using your own savings, applying for a personal loan, or even applying through a car dealership. If you manage to get financing approval, you will need to repay the borrowed amount in line with the terms you have agreed to with the institution you’ll be borrowing the money from.
When borrowing money from a bank or via dealer finance, there are subtle differences between the two.
|Car Loan||Dealer Finance|
Car financing tips
- When you know you want to buy a car, you should start planning your finances accordingly. Paying off your debts will be beneficial, as your credit score will increase. This will help you save money which will allow for a decent down payment, securing a better interest rate.
- You will need to budget. When planning your finances, you will be able to establish what you can afford on a monthly basis on a car and all the extras, including fuel costs, repairs, maintenance services, insurance costs, etc.
- Look around – speak to different banks and get different quotes to find the best one for your wallet.
- While dealerships might offer you better financing options than most banks, bank loans can be used at most dealerships and for private sales. If you get a decent dealership financing option, you can take it to the bank for a better counteroffer option.
Car finance calculator
The car finance calculator is used to calculate your monthly car repayments, as well as your total payments and the total interest based on your vehicle.
A car finance calculator generally includes the following information:
- The vehicle price
- The deposit you will be paying
- The deposit %
- The interest rate %
- The period (in months)
- The loan amount
Go to our finance calcultor to do your calculations and see if you are able to afford your new car!
When buying a car from Citton Cars, you can use the car finance calculator to divide the total price of the car by the number of years you want to pay the car off, while also taking the current interest rate into account. You will have lower monthly rates over longer periods.
When completing the car finance calculator, you are also able to include the deposit amount which will affect your monthly instalment. The general rule of thumb is that the deposit you pay should be 20% of the purchase price.
It is important to remember that the car finance calculator only gives you an estimate of what you will be paying. The best will be to contact Citton Cars directly to talk to an experienced advisor who will help you with the process.