Looking to buy a new car? We’ll do the math for you. Estimate installments for new or used cars while controlling for purchase price, taxes, interest rate, loan term, and payment frequency. Grab our premade Auto Loan smart sheet, with built-in features like a Loan Calculator, Payment Schedule, and a detailed Loan Amortization Table to help you get started!
After mortgages, auto loans are one of the largest categories of household debt in the U.S. Auto loans are typically tied to the purchase of a specific vehicle, making them a form of secured credit, as funds are paid directly to the seller or dealer, and not deposited into the borrower’s bank account.
In other words, the buyer pays the dealer directly, transferring a lump sum amount upfront at the time of sale (‘down payment’). The remaining balance is then split into fixed-rate payments spread out over the loan term. Remember, the bigger the down payment, the less interest you accrue & pay over time.
I Want To Apply for an Auto Loan. Where Do I Start?
Once you’ve picked out a car to buy, it’s time to create an official loan application.
Direct lending and dealership finance are the two most common methods of financing automobiles. Your first option is a standard bank or a credit union. Once you’ve successfully struck a deal with a car seller, the loan from the lender is used to cover the cost of a new vehicle.
To secure the best deal, explore multiple vehicle options and compare various loan schemes before making the final decision.
What We Offer
At WordLayout, we give you the ultimate auto loan calculator toolkit—making it possible for you to track and optimize your loan repayments with ease (and without the maddening math!)
From simple interest rate calculations to more complex ones, our pre-programmed Excel spreadsheets are the perfect DIY solution to manage auto loans.
Or, if you are a commercial vehicle dealer or manufacturer, you can download this entire suite, rebrand the layout, input client data, and start comparing multiple auto-loan estimates right away!
User-Friendly Features of Our Template
Both basic & advanced Excel features & functionalities are programmed into this template. With built-in formulas & calculations already done for you, you don’t have to worry about automating things from scratch.
Let’s walk you through the top, most useful features of this template…
- A quick snapshot of your loan commitments, short & long term
- A complete payment schedule over the entire loan term
- An instant loan amortization calculator based on minimal user input
- A graphical representation of the loan amount versus what you are paying as interest
- You can adjust tax rates applicable to where you live, as different states have different tax rules & regulations when it comes to the sale, loaning, liening, or leasing of vehicles.
- Use of standardized expense categories included by default, such as destination charges, title transfer fees, or other taxable/non-taxable fees
- A benchmark sheet showing side-by-side comparisons of multiple auto loan scenarios
Secured Vs. Unsecured Loans – What’s the Difference?.
Under auto loans, when you take possession and title of the vehicle in your name, the lender still holds a lien on it. That means, if you default on your loan, the lender has the legal right to repossess the vehicle to recover the outstanding debt.
In contrast, unsecured loans do not require any collateral and are therefore riskier for the lender.
Generally speaking, secured loans tend to charge a lower interest rate than unsecured ones because the lender’s risk is offset by the collateral.
Flat Vs. Reducing Loan Repayment Methods
Our template supports 2 types of loan repayment methods, catering to the different kinds of loan offers available to borrowers:
- Flat Loans: The interest rate is fixed and charged to the original loan amount for the entire term (also known as a precomputed or add-on method)
- Reducing Loans: Interest is calculated on the outstanding balance after each repayment, resulting in a decrease in interest charges over time.
Generally speaking, most U.S. auto loans use simple interest on the outstanding balance. Precomputed or ‘add-on’ methods exist but are uncommon and restricted in many cases.
Annual Vs. Monthly Interest Rate
Manually specify the Annual Interest Rate offered to you by the bank, lender or other private financier willing to give you an auto loan.
Reflecting your loan arrangements, we calculate the interest charged to you every payment period. Select from a range of payment frequencies depending on the pace of your loan arrangements, including biweekly, monthly, yearly, quarterly, etc. Most auto loans bill monthly, but some lenders or services offer different payment frequencies to choose from. Set your payment frequency in the sheet to match your loan arrangements.
So, if you have a 6 percent interest rate and you make monthly payments, you would divide 0.06 by 12 to get 0.005. Multiply that number by the current balance to find out how much you’ll pay in interest each month.
Tracking How Much of Each Repayment Is Reducing the Principal Vs. Interest
Now, you might be wondering why you need to track how much of each payment covers interest and how much lowers the principal.
Here’s why:
Over time, as the loan balance drops, the interest portion of each payment gradually shrinks while the principal portion grows.
Suppose you take out a $100,000 reducing-balance loan to buy a new car. In the early stages, most of your payment goes toward interest, and a relatively smaller portion reduces your principal.
But here is the good news: If you pay more than your scheduled installment, you’ll chip away at the principal faster. For borrowers, this is a major win bcause they end up paying less in interest over the loan term.
Key Takeaway: Knowing how your payment is split lets you take charge of your loan by helping you save money & pay off debt sooner.
What You Need To Put In Manually
- Your budget. Based on the limit you define, the Benchmark Sheet automatically tells you if each car is within your budget.
- The % of the purchase price you will pay upfront (as a down payment)
- The tax rate applicable to you (varies by state)
- The annual interest rate you are being charged by the seller, lender or car dealer
- Payment frequency: Specify how often you will pay, say, bi-weekly, monthly, or quarterly, as the case may be.
- Loan term or life (specify in years, say, 5, 10 or 15 years)
- First payment date. Based on this, a complete payment schedule is automatically generated for you
- Details of other taxable or non-taxable fees. Customize this information for each loan scheme, and be sure to check with relevant state laws or lending policies as they apply to you.
What We Calculate For You
Based on the above data, this template automatically pulls out the following loan details for you:
- Your monthly interest rate (%)
- Due date for the last payment
- How much are you paying to cover interests vs. the principal loan amount
- Total number of payments. This is calculated based on your payment frequency and loan term – For example, if you select Monthly as your Payment Frequency, and the loan term is 12 years, this number will be 144; if you choose ‘weekly’, this number changes to 624.
You can apply for an auto loan at an online marketplace or physically show up at the dealership with financing in hand. Either way, it’s advisable to do your homework so you know the type of legal loan obligations you are taking on.
Use our premade Excel tool to:
- Find out if you can afford the loan, given your budget
- Instantly calculate the monthly payment for an auto loan
- Create & maintain a live payment schedule showing when the next payment on your car is due
- Calculate the impact of extra or additional payments on your overall repayment dynamics
- Take stock of expenses other than the selling practice, say, taxes, any additional fees or discounts, etc.
- Compare multiple loan offers & vehicle options while controlling for multiple loan variables
Rounding Option
For easier calculation and consistency, we round off monthly payments to two decimal points.
You can also switch off the rounding function. Remember, if you round off in your calculations, you’ll end up with a slight difference in either the total underreporting interest paid or the overreporting principal paid or vice versa.
Key Loan Data Widgets
A good spreadsheet knows which data must pop out for users! For each auto loan you test out, four vital loan values are displayed in large, bold text boxes to help you get the gist of each loan arrangement you’re working with!
Grand total
This is the sum of all your periodic payments by the end of the loan term. It is the borrowed amount plus all the interest you paid on it. We highlight this value for you – so you know the kind of financial commitment you are walking into from day one, and whether it’s worth it in the long run!
We also highlight:
- The amount of money borrowed
- What you pay back on it every payment period
- The total interest paid by the end of the loan term
By comparing these values for multiple loan arrangements, you can see which option costs you less overall, helping you pay off debt faster.
Can I Sell a Vehicle I Bought Using an Auto Loan?
Yes, you can sell a financed vehicle, but the lien must be paid off for title transfer. This means that if a car was previously financed by a bank or private lender, then the loan or lien must be paid off, and the lienholders must release their claim before the title can be legally transferred.
Thinking of selling your old SUV? Feel free to use our printable Vehicle Bill of Sale to process quick & easy sales of any vehicles anywhere in the U.S!
What are Trade-In Deductions?
Think of trade-in deductions as a reduction in the amount of sales tax you pay at the point of purchase, so that means you only pay sales tax on the price after the trade-in value is deducted, not the full purchase price.
For example, a $2,000 trade-in reduces the effective cost of the vehicle by that amount. In other words, when you buy a car, you can think of the trade-in as making up for the fact that the vehicle is pre-owned. As buyers, this matters as it allows you to lower the amount you’re being taxed on.
Depending on where you live, trade-in deductions may or may not be treated as discounts for tax purposes. Many states tax the price after the trade-in allowance, such as New York (ST-860) or Minnesota.
Luckily, most states allow you to pay sales tax only on the difference between your new vehicle’s price and the trade-in value, resulting in immediate tax savings. Check local tax laws & rules to determine the requirements applicable in your area! Then, use the Yes/No switches in the template, as applied to your case.
States That Offer Full Trade-In Tax Credits
Texas, Florida, New York, Ohio, Pennsylvania, Colorado, Washington, Illinois, and several other states allow a full deduction of trade-in value from the taxable amount.
What are Cash Rebates? Why Are They So Common in the Automobile Industry?
For finance newbies, here’s what you need to know about rebates…
A rebate is essentially a promotional incentive offered by car dealers or manufacturers to get you to buy.
As buyers, the key benefit is a reduction in the taxable amount, earning you instant tax savings – a clear win for consumers!
In states that consider a manufacturer’s or dealer’s cash rebate as a price reduction, you pay sales tax on the post-rebate amount. So, a $3,000 rebate on a $40,000 car means you’re taxed on $37,000, not the full $40,000.
Note that in some states, the manufacturer’s cash rebate can be deducted from the sale price before calculating sales tax.
States where cash rebates are deducted from the purchase price before calculating sales tax
Alaska, Arizona, Delaware, Iowa, Kansas, Kentucky, Louisiana, Massachusetts, Minnesota, Missouri, Montana, Nebraska, New Hampshire, Oklahoma, Oregon, Pennsylvania, Rhode Island, Texas, Utah, Vermont, Wyoming, Arkansas
A Quick & Handy Resource for…
- Aspiring automobile owners
- Car dealers
- Private lenders
- Banks & credit unions
- Online lenders such as Auto Credit Express
- Government programs
- Financial planners & accountants
- Business users
You Might Also Be Interested In…
- Boat Loan Calculator
- Home Equity Loan Calculator
- Simple Interest Rate Calculator
- Loan Amortization Template
Wrap Up
Whether it’s online, in person, at a dealership, or a private sale, auto loans offer an affordable and viable option for anyone who wants to buy a car suited to their budget & financial situation.
The best part about this preprogrammed tool is the flexibility it offers to explore multiple loan scenarios. Plugging in various numbers in a spreadsheet like this allows you to instantly see how each decision or choice affects your finances in the long run. This can help you plan smarter and prepare for both risks and opportunities.
First Time Here?
Explore our complete library of finance-focused templates to help you plan and manage money—whether for personal, business, or professional needs. Have a specific topic you’d like us to cover? Do let us know. Until then, here’s to smooth & stress-free loan management!
