How to Determine an Auto Credit Loan

Determining an auto credit loan is not complicated but does require proper planning. An auto credit loan is a loan used to finance the remaining balance owed on the purchase of a vehicle. When purchasing a vehicle the buyer is often required to put money down toward the purchase and in some instances is allowed to trade in her vehicle to the dealership to deduct the value from the total sales price of the new vehicle.

Instructions

1

Calculate the final total sales price of the automobile you want to purchase. The final sales price is the price you will pay before any taxes and dealership fees are to be applied to your purchase.

2

Multiply the total sales price by the appropriate sales tax rate to determine the amount of tax you will owe on the purchase. For instance, if your final sales price is $14,000 and the appropriate sales tax is 7 percent, you would owe $980 in sales tax.

3

Add to your total sales price the amount of sales tax owed. For instance, if the total sales price is $14,000 and the amount of taxes owed is $980 your total purchase cost would be $14,980.

4

Subtract from your total purchase cost your down payment and any trade allowance if applicable. For instance, if your total purchase cost is $14,980 and your down payment is $3,000 and your trade allowance is $4,000, the total amount of your auto credit loan would be $7,980. This sum is the amount of money you will need to borrow through an auto credit loan.