Out-the-door price is not the amount financed

Use separate boxes for separate numbers

The out-the-door price describes the purchase with its charges. The amount financed describes the borrowing. The CFPB auto loan guide explains that the latter can include the vehicle, taxes, fees and selected products, reduced by a down payment and trade-in contribution. Borrowing costs are a separate part of the loan comparison.

A useful worksheet therefore has a purchase section, a payment-and-trade section and a credit section. Copy the quote’s labels before rearranging anything. If it uses “balance due” without explaining whether that is cash due or financed principal, ask rather than treating the terms as interchangeable.

Reconcile the trade and down payment

Synthetic example: a $25,000 purchase with a $3,000 cash down payment leaves $22,000 before any other adjustments. That does not make the car’s purchase price $22,000. It means part of the purchase is being paid upfront. This example omits taxes on trade-ins, prepaid finance charges and other transaction-specific details.

If a trade-in is involved, request both the allowance and the payoff of the old loan. In a simplified example, a $10,000 allowance with an $8,000 payoff contributes $2,000, not $10,000. If payoff exceeds allowance, ask where the remaining debt appears. Check the actual itemization instead of applying this illustration as a universal contract formula.

• What is the purchase total before my down payment or trade contribution?
• What trade allowance and loan payoff were used?
• Which additional amounts explain the difference between that calculation and the amount financed?

Compare the credit terms too

The CFPB guide separates amount financed from finance charge: the latter includes interest and certain borrowing fees. Record APR, payment count, payment amount, finance charge and total of payments from the actual credit documents. A low installment alone does not establish a cheaper loan.

Compare offers using the same planned down payment and the same products where possible. If the terms differ, leave those differences visible in your worksheet. Do not add a loan’s total payments to its amount financed; that would count the borrowed principal twice.

Resolve unexplained differences before signing

Ask the dealer or lender to show the bridge from purchase price to borrowing amount and from borrowing amount to repayment total. This guide helps organize that conversation; it does not calculate your legal disclosures, tax treatment or best financing choice. Keep your personal budget and the vehicle price discussion separate enough to see what changed.

Sources and scope

These sources support the practical guidance described below. They do not establish a universal state fee cap or certify a particular quote.

• CFPB: Take control of your auto loan

  March 2024 guide, printed pages 13–16: amount financed, finance charge and loan comparison. This page uses simplified examples, not a personalized loan calculation.

Publication and source-check dates are separate from a law’s effective date. These articles make no new state-specific legal determination. If a source changes, the affected article needs another review. Report a source or factual concern to [email protected].