GuidesCar1 min
First car · Lesson 3 of 14
A car with no trade-in
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Leave trade-in at zero. Tax applies to the full price, and the loan is price minus down payment plus tax.
Zero is the honest input
Do not invent a trade-in to make the payment smaller. Zero means the whole price is the starting point.
Down payment is the only cash credit left. It reduces the loan and does not reduce the tax, because tax already used a zero trade-in.
Selling the old car yourself
If you sell the old car and bring the cash, that cash is a down payment, not a trade-in. Tax will be higher than a dealer trade-in on this formula, which matches a deal with no trade-in allowance.
If your state would have taxed you the same either way, match the tax dollars rather than the label.
The rest of the form is unchanged
Rate, term, APR, insurance, registration, maintenance, and fuel work the same. Only the principal is larger than it would have been with a trade-in.
The payoff date still follows the term.
This explains how WiseCalculator treats the numbers you type. It is not a lender’s offer and it is not advice for your loan.
More in Car
- A large down payment on a carMore cash down lowers the loan payment and the interest. It does not lower insurance or fuel.
- Fees on a car loan from the APR gapThe dollar fee is the loan minus the amount the APR would support for the same payment. It is paid at the start.
- The first month of a car loanInterest in month one is the full amount financed times the monthly rate. Principal is the rest of the payment.