Auto Loan vs. Home Equity Loan
Home equity loans generally often have lower interest rates than auto loans and the interest may be tax deductible. Two good reasons to take a look at home equity loans to finance your automobile purchase.
- 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
- Annual interest rate for the auto loan.
- Cash down
- This is the money you have available to be used for fees and your down payment.
- Trade allowance
- Total dollar amount given to you for your auto trade-in.
- Amount owed on trade
- Total loan balance still outstanding on the trade-in.
- 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
- Annual interest 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 miscellaneous 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.
- No sales tax deduction for trade-in
- If you live in a state where your sales tax is calculated on your full purchase price, check this box. If this box is unchecked, sales tax is calculated on the purchase price less trade-in. Currently California, the District of
Columbia, Hawaii, Maryland and Michigan allow no deductions for trade-ins when calculating sales tax. In addition, Alaska, Delaware, Montana, New Hampshire and Oregon have no sales tax on autos.