How to Use Online Car Finance Calculators Like a Pro

Want to get an idea of the type of car finance deal you might be offered? A car finance calculator can help you work out what you could expect. Our handy tool can give you an estimate of your repayments based on the loan amount, the loan term, and your credit profile. 

Here’s a step-by-step guide to using our online car finance calculator like a pro.

What do car finance calculators take into account?

Car finance calculators are designed to provide an estimate of your monthly repayments before you apply for a loan. They take key factors into account, including:

• Loan amount – How much you want to borrow
• Loan term – The length of time you’ll take to repay the loan
• Credit rating – Your estimated credit score category
• Deposit amount – Any upfront payment that could reduce the amount you need to borrow
• Interest rates – Potential rates offered by lenders, which can vary based on your circumstances

By adjusting these factors, you could get a clearer picture of what you might need to pay each month.

Understanding the cost breakdown

On our car finance calculator, you’ll see a cost breakdown. Car finance comes with a lot of terms that can be hard to understand, so we’ve broken them down for you:

Vehicle price

This is the full price of the car you want to buy, before any deposit or finance is applied. It’s what the car would cost if you were paying for it outright.

Deposit

This is the upfront payment you might need to put towards the car. A higher deposit can reduce the amount you need to borrow. You can pay a deposit in cash, use a part exchange (your old car), or a combination of both. 

At Car Finance 247, we do work with lenders who offer no deposit car finance, so if you can’t afford an upfront payment, it doesn’t have to put the brakes on getting your next car.

Amount to finance

This is how much you want to borrow. It’s worked out by subtracting your deposit from the cost of the car, and it’s what your monthly repayments will be based on.

APR

APR stands for Annual Percentage Rate. It shows the yearly cost of borrowing, including interest and standard fees, as a percentage of the loan amount. A lower APR means the loan could be cheaper overall. The better your credit score, the lower your APR might be.

Option-to-purchase fee

This is a small fee you’ll pay at the end of the agreement if you want to take full ownership of the car, e.g. £10.

Total cost of credit

This is the extra amount you’re paying to borrow the money. Basically, the cost of using finance instead of paying for the car upfront. It includes interest and fees, but not the original loan amount.

Total amount repayable

This is the full amount you’ll pay back over the loan term. It includes everything: the amount you borrowed (the loan), the interest charged, and any fees (like the option-to-purchase fee).

It’s the total sum that will come out of your account by the time you’ve finished paying off the car.

Step-by-step guide to using a car finance calculator

Enter your loan amount

If you already know how much you’d like to borrow, use the slider or input field to enter the amount. You can adjust this as needed to see how different loan amounts might affect your estimated monthly repayments.

Choose your loan term

The loan term refers to how long you’d like to take to repay your finance agreement. With Car Finance 247, you can choose a minimum of 24 months (2 years) and a maximum of 60 months (5 years).

A longer term might mean lower monthly payments, but you’ll end up paying more in interest over time. On the other hand, a shorter loan term can result in higher monthly payments but less interest overall. It comes down to your financial circumstances and what you can afford to pay on a monthly basis. 

Enter your deposit

If you're planning to put down a deposit, this could make a real difference. A deposit is an upfront payment that reduces the amount you need to borrow. The larger your deposit, the smaller the loan, and in turn, the lower your monthly payments may be.

Some people choose to use savings, the value of their current car (as a part exchange), or even a gifted sum as a deposit. If you already know what you can afford to put down, include it in your estimate to get a more accurate idea of what your monthly repayments could look like.

It’s worth noting that while a deposit isn’t always required, offering one may improve your chances of being approved and could lead to better finance terms.

Select your credit rating

Our car finance calculator allows you to choose a credit rating that best reflects your financial situation. The options include:

• Excellent – You have a strong credit history and are more likely to qualify for the best rates.
• Good – Your credit score is solid, but you may not get the lowest interest rates.
• Fair – You might have some marks on your credit report, which could lead to slightly higher rates.
• Poor – Your credit history may have significant issues, which could mean higher interest rates.

It’s important to choose the right credit score, so you can get a more accurate estimate. If you’re unsure about your credit score, you can check it through a credit reference agency before using the calculator. Credit is subject to status.

Adjust the figures to match your budget

Once you’ve selected your loan amount, term, and credit rating, the calculator will display an estimated monthly repayment amount. If the figure seems too high, you can reduce the loan amount, extend the loan term or increase your deposit.

It could also be a good idea to improve your credit score where possible, as this could increase your chances of securing a better deal.

Note: It’s important to remember that an online car finance calculator provides an estimate, not a guaranteed offer. The actual repayment amount may vary due to factors, including your personal finances, the car you choose and current interest rates.

The takeaway

So, to get the best results from your online car finance calculator, keep these factors in mind. Be honest about your credit score, compare different loan terms and think carefully about your budget.

Remember, it’s also important to factor in all the other costs of a car, like insurance, maintenance and fuel prices when budgeting for a new car, as all costs add up!

Disclaimer: Car finance is subject to status and affordability. Terms and conditions apply. Lenders will assess your credit history and financial situation before offering finance. Make sure to carefully consider all costs involved, including any fees, interest rates, and charges that may apply to your agreement. Always seek financial advice if you're unsure about your financial commitments.