- 1). Review the purchase and finance agreement that your lender gave to you. You will need the purchase price, the cost of any add-ons (extra features not included in the price) and the destination fee.
- 2). Identify the sales tax rate for your state. You will need this information before making your calculations.
- 3). Calculate for taxes. Add the purchase price of the car, the prices of add-on features and the destination fee. Convert the sales tax percentage to a decimal (e.g. 8 percent is 0.08). Multiply the sum of the three figures by the tax rate. For example, if the sales price is $15,000, add-ons equal $1,000 and the destination fee is $500, your calculation would look like this: $16,500 x 0.08 = $1,320. This is your sales tax.
- 4). Find out how much your state department of motor vehicles charges for titling fees. According to Edmunds.com, most state DMVs charge between 1.0 percent and 1.5 percent for to title a vehicle. To find out how much this will cost you, you must multiply the sum of the purchase price, the add-ons and the destination fee ($16,500 in the example above) by the decimal form of this DMV rate. For example, if your DMV rate is 1.3 percent, your calculation looks like this: $16,500 x 0.013 = $214.50. These are the fees for title and license.
- 5). Calculate the actual payments for the car loan. Add together the purchase price, the add-ons, the destination fee, the taxes and the title and license fees. In this example, this looks like this: $15,000 + $1,000 + $500 + $1,320 + $214.50 = $18,034.50. Use the a car payment calculator to find your actual car payment. Use the rate and term in your loan contract.
next post