Auto loan not showing up as a category for payment

Tom G

How do I set up a new auto loan so that the payments go to the loan account?

Tom Young

The typical process if you want to track the loan in Quicken is to create a new Loan Account and use Quicken's loan "wizard" when you do so. That should result in an amortization schedule being created and and Reminders that you can elect to automatically show up in your checking Account as of the payment due date, with the correct split between interest and principal.

One problem with auto loans, though, is that you absolutely will have small differences between Quicken's calculation and the actual splits between principal and interest as auto loans, typically, work slightly differently than a "normal" amortizing loan, like a mortgage. So if you go that route and want screaming accuracy you'll have to make small adjustments each month.

The other approach is to create a new Loan Account and not use Quicken's wizard, simply enter the initial balance of the loan on the funding date and then make manual entries in your Checking Account as you make payments based on statements from the lender. In that case you'd simply enter the total payment in the Checking Account and then split that amount between principal and interest based on the lender' statements. The interest portion would go to some Auto Loan Interest Category that you create, while the principal amount would be recorded as a Transfer to the Loan Account as a reduction of the outstanding principal. Mechanically you'd enter the Loan Account's name as the "Category" for that piece of the split, surrounding the loan name with square brackets, e.g., [Auto Loan]. Those square brackets surrounding the loan Account's name signal to Quicken "this is a transfer."

NotACPA

Elaborating upon those differences that @Tom Young mentioned. Typical mortgage loans are "monthly interest", so the amortization schedule can be calculated from the onset … the formula is the same for every month, Outstanding-Principal times Rate divided by 12 is the Interest amount every month.

Most auto loans (and other "personal' loans) are "daily interest",so the amount of interest you owe in the next payment is partially dependent upon when you made the prior payment and the days since.

Q's Loan Wizard can only calculate Monthly Interest loans. It can tell when you sent the payment for a daily interest loan, but it can't tell when the lender received or posted it.

Thus the need for those continuing small adjustments in daily interest loans.

Boatnmaniac

Neither method is "right" or "wrong". It is a matter of personal choice as to which method will best meet your wants and needs. If you want lower Loan maintenance and don't really need or want to see all of the transactions details in the loan account, then a connected loan may be best for you. If you want more transaction details, a loan account register and the ability to link and manage the payments and payments details directly with the loan account, then a manual loan may be best for you.

FWIW, I prefer going the manual loan route because it links the payment transactions directly between the payment account and the loan account and because manual loans have account registers where we can see how the payments have been applied against the loan and can make edits there as appropriate.

Tom G

Got it. Thanks everyone.

BK

Question to the SuperUsers, @Tom Young, @NotACPA, @Boatnmaniac: The challenge I had with categorizing the Auto payment Principal portion as [Auto Loan] in the checking account (hence a transfer) is that those payments would not show up in the "Spending by Category" report and perhaps a few others and therefore the report was off by the total payments amount - naturally because transfers are excluded. In such case I found the correct representation of the spending to be the Spending tab on the dashboard. Not saying this is an issue but at first I had a hard time with it, and look forward to your thoughts. TIA

NotACPA

In the customization for the "Spending by category" report, click the ADVANCED tab and select the option you want for Transfers.

OR, use a "Cash Flow" report, which includes transfers.