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Auto Calculators for the Best Car Dealership Deal
Using these car calculators and equations before you go to a car dealership can help you get a good car deal because knowledge is power.
In addition to our free car loan calculator that does the math for you, we'll also show you the equations for calculating Sales Tax, Title and License Fees, and Car Lease Payments.
Car Sales Tax Equation
It's common for tax and license fees to not be included in car payment quotes, so knowing that extra expense will be added and knowing how to calculate it, can give you an advantage. For example, when a car dealer promises he can get your monthly payment to equal a certain number, you can remind him of that later when he tries to add on these fees, and ask him to reduce the dealer's profit to offset the fees.
Here's how to calculate car sales tax:
In addition to the car cost, make sure you know what all the options cost and don't forget to add on any other fees such as a "destination fee" which is typically between $300 to $600. Once you have the total, next find out what your state's sales tax is. If it is 7%, convert this to a decimal number (.07), and calculate the Car Sales Tax using the following formula:
Cost of the Car plus Cost of Options plus Destination Fee multipled by Sales Tax
Let's assume the car is $20,000 and all the options total $600 and the destination fee is $495. Hence, the total is $21,095 ($20,000 + $600 + $495).
Next, multiply the total by the sales tax (let's assume your state is 7%):
$21,095 X .07 = $1,476.65
Add the Sales Tax ($1,476.65) to the Car Cost ($21,095) and you have the grand total of $22,571.65.
Car Title and License Fees Equation
Car dealerships are often vague about the fees the DMV charges buyers because there are multiple; mostly small, fees which can add up to a substantial amount. Although you won't be able to calculate these fees exactly, you can still get a good idea of the total.
In most states, the DMV fees are between 1% and 1.5% of the car purchase price.
To get the DMV fees, use this equation:
Car Cost plus Options Cost plus Destination Fee multiplied by DMV Fee Percent (typically .01 to .015).
Let's assume our car cost is $20,000 and the options come to $600 and the destination fee is $495. That totals $21,095. Now, multiply $21,095 by the DMV fee percent (let's assume 1%, which numerically would be .01). Hence, we would multply $21,095 by .01, which equals $210.95 for DMV fees.
($21,095 X .01 = DMV Fees of $210.95)
Summary:
The car cost was originally $20,000, but now due to options ($600), the destination fee ($495), sales tax ($1,476.65) and DMV fees ($210.95), now costs a grand, grand total of $22,782.60
Car Loan Payment Equation
Now that you know the actual cost of the car, you can calculate the monthly payments. Since car loan calculation is complex and uses a method called amortization, it's much simpler and faster to use our handing car loan calculator. You can use either our online car loan calculator or get a free copy of our desktop car loan calculator download.
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