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Calculate monthly car payments, compare financing options, analyze trade-in value, and estimate total ownership costs
An auto loan calculator is a financial tool that computes your monthly car payment using the standard loan amortization formula. It takes your vehicle price, down payment, annual percentage rate (APR), and loan term to calculate exact monthly payments, total interest paid, and complete loan cost. The calculation uses the formula: M = P × [r(1+r)^n] / [(1+r)^n - 1], where M is monthly payment, P is principal amount, r is monthly interest rate, and n is number of payments.
Our calculator goes beyond basic payment calculation by including sales tax (varies by state), registration fees, documentation fees, trade-in value deduction, and ongoing ownership costs (insurance, maintenance, fuel). It generates a complete amortization schedule showing how each payment splits between principal and interest, allows vehicle comparison, calculates affordability based on income, and shows how extra payments reduce total interest. This comprehensive approach helps you understand the true cost of vehicle ownership and make financially sound decisions.
Choose between New Car, Used Car, or Certified Pre-Owned. Each type has different typical interest rates and depreciation patterns. Enter the vehicle price (MSRP for new, asking price for used). The calculator supports vehicles from $5,000 to $100,000.
Enter your down payment amount (recommended 20% or more). If you're trading in your current vehicle, add its value to reduce your loan amount. Both down payment and trade-in directly lower the amount you need to finance, reducing monthly payments and total interest.
Enter the annual interest rate offered by your lender (check your pre-approval or use typical rates shown). Choose your loan term from 3 to 7 years. Shorter terms mean higher monthly payments but less total interest. Longer terms lower monthly payments but cost more over time.
Add sales tax rate (varies by state), registration fees, documentation fees, and dealer fees. For complete ownership cost analysis, include estimated monthly insurance, maintenance, and fuel costs. This gives you the true total monthly cost of owning the vehicle.
Choose from New, Used, or Certified Pre-Owned with type-specific interest rates and recommendations.
Add your current vehicle's trade-in value to see how it reduces your loan amount and monthly payment.
Calculate complete ownership costs including insurance, maintenance, fuel, and all fees over loan period.
Compare two different vehicles side-by-side to see which offers better value and lower total cost.
See recommended income based on the 20% rule to ensure you can comfortably afford the vehicle.
View month-by-month payment breakdown with principal, interest, and remaining balance. Export as CSV.
See how extra monthly payments can save thousands in interest and shorten your loan term significantly.
Interactive charts and progress bars show principal vs interest split and payment composition at a glance.
The vehicle price is the negotiated purchase price (MSRP for new, asking price for used). Your actual loan amount is calculated as: Vehicle Price + Sales Tax + Registration Fees + Documentation Fees - Down Payment - Trade-In Value. For example, a $30,000 vehicle with 7% sales tax ($2,100), $500 in fees, $6,000 down payment, and $4,000 trade-in results in a $22,600 loan amount. This is the principal you'll pay interest on. Every dollar you add to down payment or trade-in reduces the loan amount by that dollar plus the interest you would have paid on it over the loan term.
As of December 2024, new car loans average 4-7% APR for borrowers with good credit (700+ score) because new vehicles have full warranty coverage and lower default risk. Used car loans typically run 1-2 percentage points higher (5-9% APR) due to increased depreciation and potential repair costs. Certified Pre-Owned (CPO) vehicles qualify for rates between new and used (4.5-8% APR) because they include manufacturer inspection, extended warranty, and meet specific age/mileage criteria. Your credit score is the primary factor determining where you fall within these ranges—excellent credit (750+) gets the lowest rates, while fair credit (650-699) sees rates 3-5% higher.
Auto loan terms typically range from 36 to 84 months, with 48-60 months being optimal for most buyers. Here's a concrete example: On a $25,000 loan at 6% APR, a 48-month term costs $587/month with $3,176 total interest, while a 72-month term costs $414/month but $4,808 total interest—$1,632 more. Shorter 36-month terms save the most interest ($2,397 total) but require $761/month payments. Avoid 84-month loans as you'll be underwater (owing more than the car's value) for 4-5 years, making it difficult to trade in or sell. Choose the shortest term you can comfortably afford to minimize total interest paid.
Our calculator uses the standard loan amortization formula: M = P × [r(1+r)^n] / [(1+r)^n - 1], where M is the monthly payment, P is the principal loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments. This formula ensures each payment includes both principal and interest, with early payments weighted toward interest and later payments toward principal.
For example, on a $25,000 loan at 6% APR (0.5% monthly) for 60 months: M = 25,000 × [0.005(1.005)^60] / [(1.005)^60 - 1] = $483.32/month. In month 1, you pay $125 interest and $358.32 principal. By month 60, you pay only $2.40 interest and $480.92 principal. This is why making extra payments early in the loan saves the most interest—you're reducing the principal that future interest is calculated on.
Raising your credit score from 650 to 750+ can lower your interest rate by 2-3%, saving thousands over the loan term. Pay down debts and fix credit report errors before applying.
Putting down 20% or more reduces your loan amount, lowers monthly payments, helps you avoid negative equity, and may qualify you for better interest rates.
A 48-month loan instead of 72 months can save $2,000-$4,000 in interest. Higher monthly payments are offset by faster equity building and lower total cost.
Get pre-approved from your bank or credit union before visiting dealers. This gives you negotiating power and prevents dealers from marking up interest rates.
Negotiate the vehicle price, not monthly payment. Also negotiate trade-in value separately, and challenge documentation and dealer fees which are often negotiable.
Even an extra $50-$100 per month can save hundreds in interest and shorten your loan by months or years. Ensure there are no prepayment penalties.
CPO vehicles offer manufacturer warranties and inspection guarantees at lower prices than new cars, with financing rates close to new car rates.
End of month, quarter, or year often brings better deals and promotional financing rates (0-2% APR) as dealers try to meet sales quotas.
An auto loan calculator computes your monthly car payment using the loan amortization formula. Enter your vehicle price, down payment, interest rate (APR), and loan term to instantly calculate monthly payments, total interest paid, and complete loan cost. Our calculator also factors in sales tax, registration fees, trade-in value, and ongoing costs like insurance and maintenance to show your true total cost of ownership.
Monthly payment is calculated using the amortization formula: M = P × [r(1+r)^n] / [(1+r)^n - 1], where M is monthly payment, P is principal (loan amount after down payment and trade-in), r is monthly interest rate (annual rate ÷ 12), and n is total number of monthly payments. For example, a $25,000 loan at 6% APR for 60 months equals $483.32/month.
New car loans offer the lowest APRs (currently 4-7% for good credit) because lenders face less risk with new vehicles under warranty. Used car loans typically run 1-2% higher (5-9% APR) due to depreciation and repair risks. Certified Pre-Owned (CPO) vehicles qualify for rates between new and used (4.5-8% APR) because they include manufacturer inspection, warranty coverage, and meet specific age/mileage requirements.
Put down at least 20% on new cars and 10% on used cars to avoid negative equity (owing more than the car's worth). A larger down payment reduces your loan amount, lowers monthly payments, and may qualify you for better interest rates. For a $30,000 car, a $6,000 down payment (20%) versus $3,000 (10%) saves approximately $1,200 in interest over a 5-year loan at 6% APR.
Private sales typically yield 15-25% more than dealer trade-in values. However, trading in offers convenience and may reduce your sales tax burden in states that allow trade-in tax credits. For example, if your car is worth $8,000 privately but dealers offer $6,500 trade-in, you gain $1,500 selling privately. Use our calculator's trade-in field to compare how each option affects your total loan cost.
Choose 48-60 months (4-5 years) for the best balance of affordable payments and minimal interest. A 48-month loan on $25,000 at 6% APR costs $587/month with $3,176 total interest, while 72 months costs $414/month but $4,808 interest—$1,632 more. Avoid 84-month loans as you'll likely owe more than the car's value for years, making it difficult to trade in or sell.
Your credit score directly determines your APR. With excellent credit (750+), expect 4-6% APR. Good credit (700-749) gets 6-8%, fair credit (650-699) sees 8-12%, and poor credit (below 650) faces 12-18% or higher. On a $25,000 loan over 60 months, the difference between 5% and 12% APR is $4,274 in extra interest. Check your credit score and fix errors before applying.
Budget for these monthly costs beyond your loan payment: full coverage insurance ($150-$300), fuel ($150-$250 for 12,000 miles/year), maintenance ($75-$150), and annual registration ($150-$500). For a $30,000 car with $500/month payment, expect $375-$700 additional monthly costs, totaling $875-$1,200/month. Use our Total Ownership Cost calculator to see your complete monthly expense.
Yes, most auto loans have no prepayment penalties, but verify this in your loan agreement before signing. Making one extra payment per year can shorten a 60-month loan by 4-6 months and save hundreds in interest. For example, adding $100/month to a $25,000 loan at 6% saves $1,089 in interest and pays off the loan 11 months early.
Expect these fees added to your loan: sales tax (4-10% depending on state), registration and title ($150-$500), documentation fee ($100-$400), and dealer processing fees ($200-$800). On a $30,000 vehicle with 7% sales tax, fees add approximately $2,800-$4,200 to your loan amount. Always negotiate dealer fees as they're often marked up significantly.
Follow the 20/4/10 rule: 20% down payment, finance for no more than 4 years, and keep total monthly car expenses (payment + insurance + fuel + maintenance) under 10% of gross income. For $5,000 monthly income, limit total car costs to $500/month. If your payment is $350, you have $150 for insurance, fuel, and maintenance. Our affordability calculator shows the maximum vehicle price for your income.
Get pre-approved from your bank or credit union first to establish your baseline rate, then compare with dealer financing. Dealers may offer promotional 0-2% APR on select new models but often mark up standard rates by 1-2%. Credit unions typically offer the lowest rates for members with good credit. Having pre-approval gives you negotiating power and prevents dealers from inflating your rate to increase their profit.
Disclaimer: This calculator provides estimates for educational purposes. Actual loan terms, interest rates, and fees vary by lender, credit score, and location. Always verify calculations with your lender and read all loan documents carefully before signing. Consult a financial advisor for personalized advice.
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Unlike basic calculators that only show monthly payments, we calculate total ownership costs including insurance, maintenance, fuel, and all fees to give you the complete financial picture.
Seamlessly factor in your current vehicle's trade-in value to see exactly how it reduces your loan amount and monthly payment - a feature missing from most calculators.
Compare two different vehicles with different prices, rates, and terms simultaneously to make the best choice for your budget and needs.
Automatically calculates recommended income based on the 20% rule to ensure you don't overextend your budget - protecting you from financial stress.
Separate calculations for New, Used, and Certified Pre-Owned vehicles with accurate interest rate ranges for each category.
Download your complete payment schedule as CSV for detailed analysis in Excel or to share with lenders and financial advisors.