From commuting to work to visiting friends and family on weekends, Brits across the country rely on cars to get them from A to B. Up there with buying a house, cars are a major purchase, so it makes sense to arm yourself with as much knowledge as possible when committing to a sale. This is where an auto loan payment calculator steps up. Fast, simple and easy to use, these handy tools make it easy to crunch your numbers when shopping for a new car.
In this article, we’ll take a closer look at the benefits of using an auto loan payment calculator and why every new car search should start with this simple step.
The popularity of auto finance in the UK
Before we get started, let’s take a moment to spotlight the popularity of auto finance in the UK. In 2022, Finance & Leasing Association (FLA) members provided more than £50 billion to fund the purchase of cars in the UK. Why is auto finance such a popular choice for Brits? Here are some of the benefits:
The option to make manageable monthly installments instead of a large lump sum is one of the key benefits of auto finance. Many Brits don’t have the funds to purchase a new car outright but can easily commit to monthly payments. This model allows Brits to get behind the wheel of cars that may otherwise be out of their budget.
From Personal Contract Purchase (PCP) to Hire Purchase (HP), there’s plenty of flexibility when it comes to auto finance. There’s no need to adopt a one-size-fits-all approach. Instead, borrowers are free to choose contract and payment terms that match their unique needs.
Regular vehicle upgrades
Unlike owning a car outright, auto finance allows motorists to upgrade to a newer vehicle more often, typically every two to three years. This makes auto finance an appealing option for motorists who love to have access to the latest makes, models and cutting-edge technology.
Most auto finance plans include comprehensive maintenance packages, which eliminates some of the biggest costs associated with car ownership. This peace of mind is a huge draw for many motorists.
Why use an auto loan payment calculator?
Crunching your numbers doesn’t have to be a headache. Here are the benefits of an online calculator:
1. Finetune your budget
Cars are one of the biggest purchases made by Brits, so it makes sense to finetune your budget before you commit. Auto loan payment calculators make it easy to punch in your numbers and generate instant data. Simply input information like the loan amount, preferred repayment term and personal credit rating to generate an instant quote estimate.
When you’re ready to proceed with your application, more information like your income, financial history, job status and personal circumstances is used to generate a more accurate quote.
2. Compare repayment terms
The total cost of your car loan can vary significantly depending on your chosen repayment terms. Auto loan calculators make it easy to compare different repayment terms and choose a timeframe that fits your budget. For example, the monthly cost of a £7,500 loan with a repayment term of three years is around £243. In comparison, the monthly cost with a repayment term of five years is around £160.
3. No impact on your credit score*
Using an auto loan payment calculator allows you to learn more about your budget and potential borrowing power, without affecting your credit score. Instead of hard searches that leave a footprint on your credit history and can raise red flags for potential lenders, an auto loan calculator gives you the freedom to explore your options with zero repercussions.
4. Transparent cost analysis
Auto loan payment calculators break down the cost of financing and make it simple and easy to understand. You’ll get an instant idea of the principal amount borrowed vs how much you will pay in interest over the lifetime of the loan. This amount is determined based on the average Annual Percentage Rate (APR) secured by borrowers. This transparency helps British borrowers make smart and well-informed decisions when it comes to auto loans. It’s a philosophy that all brokers authorised and regulated by the Financial Conduct Authority (FCA) should adhere to.
5. Avoiding overcommitting
Calculating monthly payments in advance helps borrowers take out realistic and manageable loans. This proactive approach to auto finance helps prevent overcommitting and avoid financial stress down the line.
6. Borrow from trusted lenders
The best auto loan payment calculators are designed to connect borrowers with trusted lenders. For example, at My Car Credit we work with Evolution Funding Limited to match your application with a large panel of auto finance lenders.
7. Find the best match for your needs
Auto loan payment calculators don’t just match you with lenders. The best tools use specialised technology and algorithms to select the best products for your needs. This not only improves your chances of acceptance but unlocks the best possible rates.
8. Free to use and obligation free
Auto loan payment calculators are completely free to use. There are zero obligations to commit to a loan or even finalise an application. This makes car finance payment calculators a great option for both serious buyers as well as motorists who are in the very early stages of researching loans.
Crunch your numbers today with My Car Credit
Whether you’re purchasing your first car or looking to upgrade an existing vehicle, there are no downsides to using an auto loan payment calculator. Fast, easy and transparent, the auto loan payment calculator from My Car Credit is designed to streamline the finance process. It not only helps you budget, but also gives you a clear and accurate look at the total cost of your loan. It’s this transparency that makes auto loan payment calculators such a valuable tool for motorists looking to make informed and financially responsible decisions.
*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.
Representative APR 10.9%
Evolution Funding Ltd T/A My Car Credit
Require more help?
Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!