1. What is the Martin Lewis Car Loan Calculator?

The Martin Lewis Car Loan Calculator helps you determine the total cost of a car loan by calculating the sum of all monthly payments plus any additional fees. This gives you a clear picture of the true cost of financing your vehicle.

2. How Does the Calculator Work?

The calculator uses the simple formula:

Where:

• \( PMT \) — Monthly payment amount in GBP
• \( n \) — Number of monthly payments
• \( Fees \) — Any additional fees associated with the loan

Explanation: This calculation shows you the total amount you'll pay over the life of the loan, including both principal and interest payments plus any fees.

3. Importance of Calculating Total Loan Cost

Details: Understanding the total cost helps you compare different loan offers and make informed decisions about car financing. It reveals the true cost beyond just the monthly payment amount.

4. Using the Calculator

Tips: Enter your monthly payment amount, the number of payments (loan term in months), and any additional fees. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why calculate total loan cost instead of just looking at monthly payments?
A: The total cost shows you the complete financial picture. A lower monthly payment might mean a longer loan term and higher total cost.

Q2: Should I include the down payment in the fees?
A: No, the down payment reduces the amount you finance. Only include fees that are in addition to your loan payments.

Q3: What fees should I include?
A: Include any loan origination fees, documentation fees, or other mandatory charges associated with getting the loan.

Q4: Does this include insurance or maintenance costs?
A: No, this only calculates the loan costs. You should budget separately for insurance, maintenance, and other ownership expenses.

Q5: How can I reduce my total loan cost?
A: Consider making a larger down payment, choosing a shorter loan term, or negotiating a lower interest rate.