Biweekly Auto Loan Calculator
This tool calculates what your auto payment will be on an accelerated bi-weekly schedule. Simply enter the principal balance owed on your car, your current car loan interest rate, and the loan term in years. When you push CALCULATE, you’ll see your bi-weekly payment amount and the total interest you’ll end up paying.
If you are making biweekly payments from the very beginning then enter all the other relevant information associated with the initial payment including sales tax, trade in & down payment. If you are starting biweekly payments in the middle of a loan then set everything except the interest rate, loan term & current balance to zero, while setting the car purchase price to the amount remaining on your current car loan.
Strategies to Save Money
Unless you have a sizable personal savings or you happen to be independently wealthy, chances are good that you'll need to finance a vehicle purchase through a lender. And there's nothing wrong with this approach - consumers do it every day.
However, you do need to exercise due diligence when it comes to selecting suitable financing options if you don't want to end up overpaying for your automobile. As a consumer, the onus is on you to choose the most favorable terms.
This can be difficult to determine. And there's no denying that purchasing a vehicle requires some amount of financial know-how. But with a bit of knowledge under your belt, you should be able to find the financing options that are most likely to save you money.
Here are a few tips that should get you on track for affordable financing and an automobile purchase that doesn't break the bank.
Save for a Down Payment
The place to start when it comes to purchasing a personal vehicle is with cash on hand. The more money you have to put down up front, the less you're going to end up paying over time in related charges like interest.
Not only will you end up with fewer interest payments in the long run with cash up front, but you may also be able to secure a lower interest rate by borrowing less money from your lender. So it behooves you to squirrel away some money for your next vehicle purchase.
That said, you're not completely out of luck if you don't have a sizable down payment on hand when your current vehicle craps out and you find yourself immediately in need of new transportation. If this is the case, you can pay extra towards the principle each month in order to pay off your automobile more quickly. And you’ll reduce your interest payments in the process.
Shop for Low Interest Rates
As a consumer, it's your job to do everything you can to get the lowest price on what you buy, and when it comes to securing financing for your automobile purchase, this means shopping around for the lowest possible interest rates.
You'll want to compare traditional lenders like banks, but don't forget that dealerships often have deals in place with their own lending agencies to offer buyers lower interest rates than what they might be able to find elsewhere. You may prefer to secure your own means of funding your purchase, but don't dismiss dealer financing out of hand - it could net you a better rate.
Choose a Short Loan Term or a Different Payment Plan
The terms you'll negotiate for your auto financing include more than just the sticker price and the interest rate you agree to – the terns also include the way in which you pay. The standard agreement includes monthly payments over the course of five years, but you don't necessarily have to accept such an arrangement.
If you know you can handle larger monthly payments, you could opt for a shorter term for financing, say three or four years instead of five. Or if you want to slip in an extra payment on your loan each year, you could pay biweekly instead of monthly.
Although there are twelve months in a year, there are 52 weeks, which makes for 26 biweekly payments (the equivalent of thirteen payments each year instead of twelve). Selecting such terms for repayment will reduce the amount you pay in interest and save you money over time.
Check Your Credit
Before you start the negotiation process, it's important that you understand the role your credit score plays in financing an automobile purchase. The amount of financing you are ultimately approved for and the interest you pay are not wholly based on your down payment and earnings, but also on your credit rating.
So you need to know what your credit score is. You can find out by ordering a report from a site like AnnualCreditReport.com.
Once you know your credit score, you can either use it to negotiate better terms on your automobile purchase (if you have top tier credit) or you can find ways to clear up any issues and improve your score before you attempt to buy a vehicle.
Join a Credit Union
If you've exhausted other known forms of financing or you simply can't afford the terms offered through traditional lenders or the dealership, perhaps you're interested in exploring more favorable lending options.
If you're not already a member of a credit union, now is a good time to look into what these alternative banking institutions have to offer. In terms of automotive financing, they may be able to provide you with some of the best rates around.
But you have to be a member to finance through a credit union. So look into institutions in your area to see if you qualify for membership.
Buy a Certified Pre-Owned Vehicle
It’s hardly a surprise, but one of the best ways to save money when financing a vehicle is to purchase a less expensive automobile. The only problem is that you want to make sure you get a reliable vehicle that has all the amenities you crave, including a warranty.
While used vehicles are certainly less expensive than new ones, most don't come with a warranty and they may have issues you don't know about. And although there are inexpensive options for new vehicles, you might not get the luxury and reliability you want with your budget.
This is where certified pre-owned vehicles enter the picture. They are slightly used, but often they're only a year or two old. And to make sure they're in good working condition, the dealership provides a full inspection and repairs before they're sold.
As a result, you'll score a practically new automobile at a steeply discounted price, and you'll get a partial warranty (or a full warranty in some cases), as well.
Run the Numbers
If you're looking to save money on your automobile purchase, making sure you understand all the costs is essential. This means you'll need to run the numbers to figure out which terms are going to net you the biggest savings when all is said and done.