Auto Loan Calculator
Estimate monthly car payments and total cost of financing a vehicle.
About the Auto Loan Calculator
This auto loan calculator estimates the monthly payment on a new or used car loan, accounting for the vehicle price, down payment, trade-in value, interest rate, and loan term. Enter these five figures and the tool returns your monthly payment, total interest paid, and the total cost of the car including interest — the true cost of ownership that dealerships rarely highlight.
Car loans are typically structured as 36, 48, 60, 72, or 84-month terms, with rates varying widely by credit score, lender, and whether the car is new or used. As of 2024, new-car loan rates average 7-9% and used-car rates 9-12% for borrowers with good credit. Longer terms (72 or 84 months) reduce the monthly payment but significantly increase total interest and create a risk of being 'underwater' on the loan — owing more than the car is worth.
The calculator also handles the case where down payment plus trade-in exceeds the vehicle price (you pay cash for the difference). In that case, no loan is needed.
How It Works
The auto loan payment uses the standard amortization formula:
M = (P * r) / (1 - (1 + r)^(-n))Where:
- P = loan amount = vehicle price - down payment - trade-in value
- r = monthly interest rate = annual rate / 12 / 100
- n = total payments = years * 12
Most U.S. auto loans use simple-interest amortization, meaning interest accrues daily on the outstanding principal only — no compounding. This is favorable to borrowers because extra payments reduce principal directly, lowering future interest accrual. (Verify with your lender; some subprime lenders use precomputed interest, which locks in total interest at origination and is far less favorable.)
Total interest equals total paid minus loan amount: I = M * n - P. The total cost of the car equals vehicle price plus total interest — this is the figure to compare against paying cash.
Worked Examples
Suppose you buy a $30,000 car with $6,000 down, no trade-in, at 6.5% interest for 5 years.
- Loan amount: $30,000 - $6,000 - $0 = $24,000
- Monthly rate: 6.5% / 12 = 0.005417
- Monthly payment: $24,000 * 0.005417 / (1 - 1.005417^(-60)) = $469.45/month
- Total paid: $469.45 * 60 = $28,167
- Total interest: $28,167 - $24,000 = $4,167
- Total cost of car: $30,000 + $4,167 = $34,167
Compare with a 7-year (84-month) loan at the same rate: payment drops to $353.65/month but total interest jumps to $5,706 — an extra $1,539 over the life of the loan. The longer term also means the car depreciates faster than the loan balance, putting you 'underwater' for the first 3-4 years.
Adding a $5,000 trade-in reduces the loan to $19,000 and the monthly payment to $371.61, saving $3,825 in interest over 5 years.
When to Use This Tool
Use this auto loan calculator when:
- Comparing dealership financing with bank or credit union pre-approval
- Deciding between 36, 48, 60, 72, or 84-month loan terms
- Estimating the impact of a larger down payment or trade-in
- Comparing new-car financing (often 0-3% promotional) with used-car financing (typically 6-12%)
- Determining whether refinancing an existing auto loan at a lower rate saves money
- Comparing a 0% promotional APR with a cash rebate (often $1,500-$2,500)
- Budgeting for a vehicle purchase before visiting the dealership
For the rebate-vs-0% decision: take the rebate and use a credit union loan if the rebate exceeds the interest saved by 0% financing. This calculator helps model both scenarios.
Limitations & Disclaimer
This calculator assumes a fixed-rate auto loan with level monthly payments and simple-interest amortization. It does not model sales tax (varies by state, typically 4-10% on price minus trade-in), title and registration fees, dealer doc fees, gap insurance premiums, extended warranty costs, or prepayment penalties (rare on auto loans but possible in some subprime contracts). Some captive finance companies offer 'precomputed interest' loans where the total interest is fixed at origination — these are less favorable than simple-interest loans and may carry prepayment penalties. Always review the retail installment contract carefully before signing. This is an educational estimate, not a loan offer. See our disclaimer for full terms.
Frequently Asked Questions
What is a good interest rate for a car loan?
As of 2024, new-car loans average 7-9% APR and used-car loans 9-12% APR for borrowers with good credit (700+ FICO). Borrowers with excellent credit (760+) can sometimes get promotional 0-3% rates on new cars. Subprime borrowers (below 620) may face 15-25% APR. Always shop around: credit unions often offer rates 1-3 percentage points below dealerships.
Should I take the 0% promotional financing or the cash rebate?
It depends on the rebate size and your alternative financing rate. A $2,000 rebate on a $30,000 car with a 6.5% credit union loan beats 0% dealer financing over 5 years by about $1,000 in interest savings. Use this calculator to model both scenarios and choose the cheaper option.
What is 'negative equity' or being 'underwater' on a car loan?
Negative equity means the loan balance exceeds the car's market value — common with long-term loans (72-84 months) on rapidly depreciating vehicles. If you total the car or want to sell it before payoff, you'll owe the difference. Gap insurance (often $500-700) covers this gap and is recommended for loans over 60 months or with low down payments.
Does the calculator include sales tax, registration, and dealer fees?
No — enter the vehicle price without these. In most states, sales tax is computed on (price - trade-in) and is added to the loan amount. Registration and dealer doc fees ($100-800) are typically added to the loan as well. To get an accurate monthly payment, add these to the vehicle price field or compute them separately and add to the loan principal.
Can I refinance my car loan to lower the payment?
Yes — refinancing makes sense if your credit has improved or interest rates have dropped since origination. A 1-2 percentage point reduction can save $1,000-3,000 over the life of the loan. Watch out for refinancing fees ($50-200) and the temptation to extend the term (which lowers the payment but increases total interest).
Is a longer loan term always worse?
In total interest terms, yes — longer terms always cost more in interest for the same rate. But longer terms can be appropriate if (1) you have volatile income and need the lower payment for cash flow, (2) you plan to pay extra when possible to shorten the effective term, or (3) you qualify for a promotional 0% rate on a longer term. Avoid 84-month terms on rapidly depreciating vehicles.
Last updated: July 21, 2026 · Author: HT99 Tools Editorial Team · Reviewed by: HT99 Tools Editorial Team