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Question for you @Six Minutes. Smarter. : I noticed in the Total Cost of Finance field that you did "=Total Paid-Cost of Car." This would have the finance cost also include the down payment instead of being the interest only, correct? Shouldn't the Cost of Finance be only interest since that is the amount you are forced to pay over what you borrowed? Am I thinking incorrectly on this? Thanks for your help!
taxes and fees at purchase are often included in the purchase price. You could make fields for the car price, one for taxes, one for fees. Then, total that and make a total price. Use the total price in the calculation. Total price - down payment = loan amount.
How would we do this in reverse? For example I’m paying $300 a month, for 72months (6 years), with an interest rate of 5%. What’s the formula to find the total loan amount? (I keep seeing =PV, but I’m confused at how when I use PV, the outcome is a lesser number then if I multiply monthly payment (300) by Term (72 months). How is it more expensive at 0%? I’m so confused and need help Ralph.
Easiest to create a couple new rows under car price. One row for taxes and another row for price+taxes. You may pay taxes all at start along with down payment. Or some may roll taxes into the loan, increasing the balance and loan payments. Taxes will vary by state, and some states (like Oregon) won't have taxes. There could be some other fees to include, too. Destination charge and doc processing fees.
No, there doesn't have to be a down payment. The down payment is used to reduce the amount of the loan. The loan amount is really what you use in the PMT function. To make the calculator more realistic, I like having down payment amount and calculate the loan by subtracting the down payment from the car price. If you want, enter 0 as the down payment and you'll see the loan is the same as the car price. You could even enter a negative value in the down payment and that would indicate you're borrowing more than the price of the car. This might occur if you were rolling older car trade-in debit into the new loan.
Awesome video but if you’re putting a down payment, the total cost of the car decreases, but you wrote the formula where the total cost increases. You need to enter a negative value to determine true price of the car. The way you entered it was taking on another $4500, which isn’t accurate. The total value borrowed would be $-4500 less and thus decreasing monthly payment and less interest owed.
awesome video and super easy to understand, I did just like you demonstrated then I copy column then added a few columns so that Im able to display several scenarios. thanks for posting!!
Glad it helped! I read an article this weekend that the average new car price is now $47,000 and the average monthly car payment is $700. That is insane to me. I really like the idea of making side-by-side calculators so you can see the impact of a different down payment or a different interest rate.
@@SixMinutesSmarter yeah I believe this too as lower supply has created higher demand for cars so some dealers are adding "Market Adjustment" fee of $3k and last month I see theyre rasing it to $5k so thats my first qst when i call and if answer is yes then I hang up and call nxt dealership lol.
big question i want this bmw m4 cs really bad its 50,000 grand when i loan it and three years later the car price is depreacted like 20,000 grade well do i still have to pay that 50,000 grade or the price of what its going to be?
@@SixMinutesSmarter i found this 2018 bmw m4 for 37,000 but its the regular one i truly want the cs one but i guess i should just get the 37,000 one and buy the other one in the uture because the msrp is gonna be like a whole 30,000 more just for the cs
Geez, I just looked up the BMW M4 CS. It's like $70,000 - $100,000 US. I'll have to stick with my 5-year-old Ford a little bit longer. Even better, invest the $70K in a fund averaging 11% for the next 20 years and you'll end up with $564,000.
@@SixMinutesSmarter also roth ira if you invest 230,000 over 20 or 30 years and you'll have 2 million and spending it down have 4 million I want the car because I'm young and if I start making 12,000 a month and put 5 thousand a month would be fun
yep, the price of the car should include taxes and other fees. Those will vary by state (no sales tax in Oregon ). However, i bet most people financing a car roll those costs into the loan. for more detail, create a few additional rows under car price. include tax, fees, other. then have a row for total price. The rest would be the same. total price - down payment is loan amount.
Hello. Lets say I want to include the deposit in the price of the car, meaning the company pays the deposit and not the customer. How would I calculate that in Excel. Deposit may change from 10% / 15% / 20% / 30% / 40%
I'd create a couple of extra rows (cells) beneath original price. So, we might have list price of the car as $30,000, then have a value for deposit rate. That would be the value of 10%, 15%, etc. Then the cell below would be Modified car price. That would be =(original list price) - (original list price * deposit rate). Now, you'd base your loan calculations off the modified car price. But the cost of finance would be based on the original list price. This is an interesting scenario where a company benefit can really make a car lease or car loan a very good deal.
