Roeser Accountancy - Fresno Accountant, Business Valuation, & Financial Consultant

Home Equity Loan vs. Auto Loan Analysis

Home equity loans often have lower interest rates than auto loans and the interest maybe tax deductible. Two good reasons to take a look at home equity loans to finance your automobile purchase.

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Definitions

Term:
Number of months for the auto loan.

Purchase Price:
The amount, before taxes and fees, that you are paying for this auto.

Auto loan interest rate (APR):
Annual percentage rate for the auto loan.

Cash down:
Check this to have your total down payment be a specific cash amount. This money will be used for fees and your down payment.

Percent of purchase price:
Check this to put a percent of the purchase price as your cash down. This money will be used for fees and your down payment.

Trade allowance:
Total dollar amount given to your for your auto trade-in.

Amount owed on trade:
Total loan balance still outstanding on the trade-in.

Fees:
Fee charged for title transfer. Also include any other fees that may be due at delivery.

Sales tax rate:
Sales tax percentage rate charged on this purchase.

Home equity interest rate (APR):
Annual percentage rate for the home equity loan.

Home equity closing costs:
Any additional costs to the home equity loan. This should include any appraiser fees, points paid or other misc. fees.

State and Federal tax rates:
Your state and federal marginal income tax rates. These rates are used to determine the tax savings associated with a home equity loan.

The information presented is of a general nature only and may omit details related to your particular circumstances, and accordingly cannot be regarded as legal or tax advice. Please contact the office to discuss how this information pertains to your specific financial or tax situation.