When looking to finance a new car, the sticker price may not be enough to estimate the real bottom line---the monthly payment . Using web-based auto purchase calculators will help you calculate the monthly payments you may need to pay.

Even if you find car cost accounting difficult, financing calculators are an easy solution for those who still want to be sure they get a fair price and monthly payment before dealing with car salesmen (see "The Car Salesman Technique for tricks and traps used in new car purchases).

Before getting started, have some baseline figures ready:

Purchase Price. This information can be taken from many sources, among them Kelley Blue Book and other reputable automobile websites. You can also review current adds to get an overall figure for the car you wish to buy.

Rebates. Rebates are incentives the buyer gets for purchasing the vehicle. Cash rebates are deducted from the final cost of vehicle price, tax and licensing fees. These may vary by dealership

Value of trade-in. Negotiating a good price for your old vehicle helps lower the total cost of the new vehicle that you want. Prepare by researching car valuation guides. Determine a realistic asking price for your old vehicle based on service history, mileage and condition of bodywork. Car dealers make more money upon resale by lowering your trade-in cost, so it is important to know the ideal trade-in value you are willing to accept. For those who still have a remaining balance on the trade in, this will be added to the total cost.

Down payment. Choose whether you want to pay a bigger down payment, thereby decreasing monthly payments and establishing good credit or paying a smaller down payment to free up more funds for other car-related expenses, like insurance (see budgeting-help.com guides on insurance for more information) . Keep in mind that putting out a smaller down payment can cost you more in the long run. There are benefits to either option, so decide carefully.

Financing. Financing can be found through the dealer, your bank or credit union, or other lenders. The total amount financed will include not only the unit price but other fees, including taxes, title and registration fees, delivery charges, and add-ons such as extended warranties or service agreements. The additional fees can tack on hundreds to thousands to the selling price, depending on the car you purchase. You will need consider these charges in addition to the selling price when looking for financing.

Loan Terms. How long (how many months) you will need to pay off your financing. A bigger amount of financing can be paid off in longer period of time. Smaller financing offers shorter time for repayment. You may also want a longer loan term to lower your monthly payment. However, you will accrue more interest in the long run.

Interest rate. Current rates can be determined from the bank, dealer, or lender you use for financing. The interest rate is crucial to calculating the monthly payment of your car. With that in mind, you should look for the lowest interest rate possible for your car loan. Additionally, you may want to consider getting a less expensive car to lower the interest accrued, especially if you are only offered higher interest rates.

Just remember that even if you do have your estimates of monthly payments, you will still need to negotiate from price point of the car itself. Negotiating based on monthly payment is often a scheme used by car salesmen. They may get you the monthly payment you want, but over a longer loan term with higher interest rates. You should nonetheless be prepared for the new expense of a car payment, as it will help you when it comes time to negotiate the best price and interest rates for your car and its financing.


References:
American Institute of Certified Public Accountants. How Much will my Monthly Car Payment be?
http://www.360financialliteracy.org/Life+Stages/Career/FAQs/Cars+and+Auto+Insurance/How+much+will+my+monthly+car+payment+be.htm
Bank of America. How Much Will My Vehicle Payment Be? http://www.bankofamerica.com/financialtools/index.cfm?template=planning_tools&calcid=auto05
MSN Autos. New Car Rebates.
http://autos.msn.com/home/rebates_all.aspx

Wells Fargo. Low Down Payment Options.
http://www.wellsfargo.com/home_center/buying/articles/cis_hc_atcl_financinglowdown.jhtml