Read the written offer before the monthly payment
This hypothetical purchase uses a $30,000 vehicle and a $3,000 cash down payment. Offer A finances $500 in fees, at 6% for 48 months. Offer B finances $1,500 in fees, at 4% for 72 months. Taxes, trade, payoff, rebate and upfront fees are zero solely to isolate the comparison. Real tax and fee figures must come from the written buyer’s order.
| Item | Offer A | Offer B |
|---|---|---|
| Price | $30,000.00 | $30,000.00 |
| Cash down | $3,000.00 | $3,000.00 |
| Financed fees | $500.00 | $1,500.00 |
| Amount borrowed | $27,500.00 | $28,500.00 |
| Contract interest rate | 6% | 4% |
| Term | 48 months | 72 months |
| Monthly payment | $645.84 | $445.89 |
| Total interest | $3,500.24 | $3,603.92 |
| Loan payments + cash down | $34,000.24 | $35,103.92 |
Offer B reduces the scheduled payment by $199.95, but adds 24 months and $1,103.68 in modeled cash paid. The lower payment may change monthly affordability. It does not prove a lower total price or borrowing cost.
Separate the rate effect from the fee and term effects
A comparison that changes three inputs at once cannot tell you which input caused the difference. The next table starts with A and changes one assumption at a time. These intermediate rows are diagnostic calculations, not offers available from a lender.
| Case | Monthly payment | Total interest | Loan payments + down |
|---|---|---|---|
| A: $500 fees, 6%, 48 months | $645.84 | $3,500.24 | $34,000.24 |
| Only lower rate: 4% | $620.92 | $2,304.35 | $32,804.35 |
| Then add $1,000 financed fees | $643.50 | $2,388.15 | $33,888.15 |
| Then extend to 72 months (B) | $445.89 | $3,603.92 | $35,103.92 |
A lower rate reduces interest when the principal and term stay fixed. Financing additional fees increases the starting balance. Extending repayment reduces the required installment but keeps a balance outstanding longer. None of those statements, by itself, decides whether an offer fits a particular household.
Reconstruct the amount borrowed
The model uses price + actual estimated tax + financed fees + trade payoff − cash down − trade allowance − rebate. Upfront fees are added to cash paid, not financed again. If a trade is involved, keep its allowance and existing loan payoff separate. A $12,000 allowance with a $15,000 payoff adds $3,000 of old debt; it does not provide $12,000 of free down payment.
Use the same trade asset and payoff when comparing two offers for the same purchase. Cash-paid totals do not include the value of the vehicle surrendered. They are not a full cost-of-ownership measure: insurance, maintenance, fuel, depreciation and eventual resale are outside this financing calculation.
APR is a separate disclosure
The CFPB’s definitions distinguish contract interest from APR, which includes certain borrowing fees. This model uses the contract rate on the modeled balance. Substituting a fees-inclusive APR while also financing fees can overstate the payment. The tool does not reconstruct regulatory APR or the disclosure’s amount financed.
Compare the lender’s disclosed APR, finance charge and total of payments alongside the buyer’s order. The CFPB offer-comparison guidance explains why the installment is only one part of the decision.
When this calculation will differ from a contract
- Daily-interest accrual and irregular payment dates can change actual interest.
- Late fees, penalties, payment holidays and optional products may create cash flows not entered here.
- Extra-principal payments are excluded from this comparison; the main auto-loan tool models them separately.
- Tax treatment of trades and rebates varies. Enter an actual estimated dollar amount, not a presumed nationwide rule.
Load both offers into the comparison
Replace each field with figures from two written offers, then check the difference column line by line. If the down payment draws on emergency cash, use the reserve planner to make that separate trade-off visible.
Calculation record and corrections
Methods, model boundaries and test cases are recorded in the October 31 calculation specification. Send a reproducible discrepancy, the page and the input values to contact@mycalcvault.com; do not send confidential account records.
MyCalcVault is not a bank, lender, broker, accounting firm, law firm, or licensed advisory practice. The content is educational and general. It is not individualized financial, investment, legal, or tax advice.