Auto loan calculators are great, but watch out when you're buying a Ford car.
Pretty well every website that offers auto loans has an auto loan calculator as part of the site. All you need to do is plug in the numbers and you will know what the monthly payments are. This is true in most cases, but beware when you are figuring out the monthly payments from Ford Motor Credit.
Under normal situations, when you have the auto loan calculator in front of you, you simply enter in the new vehicle value, the sales tax percentage, the down payment, the terms in months, the annual percentage interest rate and the residual value at the end. What you get out are the monthly payments, the total loan/lease amount and the total vehicle price.
But with Ford dealers, the interest rate quoted will not represent the true APR of the lease. This is because Ford adds an administrative fee of approximately 0.00111 times the capital cost to each monthly payment. This makes the monthly payments fall about 1.5% higher than the rate quoted by the Ford dealer. Consider the sample Ford lease below:
Capital Cost = $21,400 Residual = $16,683
Months = 24 Interest Rate Quoted by Dealer: 9.0%
The Ford Payment would be the monthly payment at 9% using the constant yield method plus the administration cost of 0.00111 times the capital cost, or
$338.08 + $21,) = $361.84
The equivalent APR for this monthly payment stream is 10.5%.
Always verify the figures with the dealerships to ensure you are not paying for any extra hidden costs.
