Auto Loan Calculator
How to Calculate a Car Loan Payment
An auto loan calculator shows your monthly car payment before you step into a dealership, so you know exactly what you can afford. It also reveals the total interest and the true total cost of the vehicle.
A worked example with the default inputs shows the leverage. A $35,000 vehicle, $5,000 down, $3,000 trade-in, financed at 6.5% for 5 years, leaves $27,000 to borrow. The payment computes to about $528 per month, total interest across 60 payments comes to roughly $4,697, and the full cost of the car - down payment, trade-in and payments combined - reaches about $39,697. Stretch the same loan to 72 months and the payment eases to about $454, but interest rises to roughly $5,679. The longer term also extends the stretch of years in which you owe more than the car is worth.
Gather five figures before you start: the vehicle price, your cash down payment, the trade-in value, the APR, and the term in years. The calculator subtracts the down payment and trade-in from the price to find the financed amount, then applies the standard amortization formula at your monthly rate. Four results come back: the loan amount, the monthly payment, total interest across the term, and the true total cost including the money handed over upfront. Comparing total cost across two deals often reverses what the monthly payment alone suggests.
Shoppers use this before negotiating, since knowing the payment math strips the mystery out of dealer financing tables; refinance shoppers use it to price a lower APR; and budgeters use it to enforce the keep-your-payment-under-10%-of-take-home rule. Its limits deserve naming: it excludes sales tax, registration, dealer fees and any add-ons rolled into the loan, all of which raise the financed amount in practice. It assumes a fixed APR and equal payments, and the trade-in value is what you negotiate, not what a dealer necessarily offers. Run it with a rate quote from your bank or credit union as a negotiating anchor.
Frequently Asked Questions
How is a car loan payment calculated?
The loan amount is the price minus your down payment and trade-in. The monthly payment is then computed with the amortization formula: M = P × r(1 + r)^n / ((1 + r)^n - 1), where r is the monthly rate and n is the number of months.
Should I choose a 48 or 72 month car loan?
A shorter term means a higher monthly payment but much less total interest. Longer terms (72-84 months) lower the payment but you pay more interest and risk owing more than the car is worth as it depreciates.
What is a good APR for a car loan?
It depends on your credit score and the market. Well-qualified buyers can often get rates near new-car promotions, while subprime borrowers pay much more. Improving your credit score before applying can save thousands in interest.
How much should I put down on a car?
Twenty percent down on a new car, or ten on a used one, is the common guidance. Cars depreciate fastest in the first two years, and a larger down payment keeps you from owing more than the vehicle is worth. It also lowers both your payment and the total interest.
Does my credit score change my car payment?
Substantially. Lenders price auto loans in tiers, and the spread between top-tier and subprime APRs can exceed 10 percentage points - worth thousands of dollars over a 5-year term. Check your credit reports, dispute errors, and get preapproved before visiting a dealership.
Is 0% APR financing better than a cash rebate?
Sometimes, and the math decides. A rebate shrinks the amount you finance, while 0% APR eliminates interest on the full amount. Run both scenarios with this calculator using the same term - if the interest you would avoid exceeds the rebate, the financing deal wins.