Car Loan vs Cash Calculator

Better understand the best way of financing a car with this helpful calculator!

This calculator aims to answer the following question: should you take a car loan if the dealer offers you a lower price?

If you have taken a loan, the lender is taking a risk in lending money to you. While the money is with you, the lender is unable to use those funds for potentially more beneficial use, incurring what’s known as opportunity cost. 

As such, you will have to repay more than you borrowed. You’ll have to return not only the amount that you originally borrowed but also the interest as compensation to the lender. The interest rates you pay on loans reflect your credit risk, which is the likelihood of you not paying back the loan. The likelier you are to pay back the loan, the lower the rates you’re charged (all other things equal).

How to use this template

1. Click the link to the read-only document

https://docs.google.com/spreadsheets/d/1WPoY_xaL7PEyhmf613K9jKadtOkJcUcJj3hbFOEHub8/edit?usp=sharing

2. Make a copy of this calculator for your own use 

[Open document > File > Make a copy]

3. Use the template for your own personal use!