Car Loan / Total Cost of Ownership Calculator mechanism

Model scope

The amortization approach is standard and conditionally correct under the stated assumptions, but the specification does not define the missing periods, rate convention, resale basis, or treatment of ownership periods that differ from the loan term. The phrase 'full ownership cost' is not fully honest unless omitted ownership costs are disclosed. Verdict remains NEEDS_REVIEW until these conventions and validation rules are made explicit.

• The standard amortization formula is only named, not specified. The implementation must define principal P=price-down_payment, periodic rate r=APR/12, and number of payments N=12×term_years.
• The TCO summation does not specify whether payment, insurance, fuel, and maintenance are monthly or annual, creating a unit-mismatch risk.
• The ownership period n is not explicitly defined or connected to the loan term. If ownership ends before loan payoff, summing payments does not account for the remaining loan balance or payoff amount.
• The resale percentage basis is ambiguous: it could mean a percentage of original purchase price, financed amount, or another vehicle-value estimate.
• Total interest is undefined when the ownership period differs from the amortization term or when the loan is paid off early.
• The claimed 'full ownership cost' omits potentially material items such as taxes, registration, title fees, financing fees, repairs, tires, and charging costs for electric vehicles.

Units and conventions

• price and down_payment are in the same currency.
• APR is a nominal annual rate represented as a decimal, such as 0.06 for 6%, compounded monthly; monthly rate r=APR/12.
• term and ownership period are expressed in years and converted to whole monthly periods: N=12×years.
• For these test vectors, ownership period equals the loan term, so total loan payments are M×N.
• Insurance, fuel, and maintenance estimates are annual unless explicitly labeled monthly; annual estimates are divided by 12 before monthly summation.
• Resale value is assumed to be price×resale_percentage, where resale_percentage is a decimal.

Inspectable vector

One of 4 source-bound review vectors:

{
  "inputs": {
    "price": 30000,
    "down_payment": 5000,
    "apr": 0,
    "term_years": 5,
    "ownership_years": 5,
    "annual_insurance": 1800,
    "annual_fuel": 2400,
    "annual_maintenance": 900,
    "resale_percentage": 0.4
  },
  "expected_outputs": {
    "monthly_payment": 416.67,
    "total_interest": 0,
    "resale_value": 12000,
    "full_tco": 38500
  },
  "working": "P=30000−5000=25000. N=5×12=60. Because r=0, M=P/N=25000/60=416.6667, displayed as 416.67. Total interest=M×N−P=25000−25000=0. Annual ownership costs=1800+2400+900=5100. Five-year ownership costs=5100×5=25500. Resale value=30000×0.40=12000. Full TCO=25000+25500−12000=38500."
}

Failure boundary

BREAK_CLAIMED · SELF_FLAGGED

A zero-month term creates a zero amortization denominator and produces an undefined payment; the calculator should reject nonpositive terms. The specification also leaves the resale-percentage basis ambiguous, which can change TCO materially.

Other records

Sources and evidence

These pointers bind the page to evidence. They do not grant authority or collapse verification into deployment.

• VERIFIED_LEDGER.json
• evidence-tranche5/tranche5-results.json
• BOUNDARY_HAZARD_CATALOG.json