Auto Loan Calculator
Calculate car loan payments, total interest, and see if you can afford that vehicle.
Auto Loan Calculator
How the Calculation Works
Formula: Monthly Payment = [Loan Amount × (Interest Rate / 12) × (1 + Interest Rate / 12)^(Months)] / [(1 + Interest Rate / 12)^(Months) - 1]
Auto loans use the same amortization formula as other installment loans. The calculation factors in your vehicle price, down payment, interest rate, and loan term.
Key Variables: Vehicle price minus down payment equals your loan amount. The interest rate is divided by 12 for monthly calculations. Typical auto loan terms are 36-72 months, with 60 months being common.
Disclaimer: This calculator estimates payments based on the vehicle price and financed amount entered. It does not model sales tax, trade-in value, dealer fees, title/registration fees, or rebates. Actual monthly payments depend on how these costs are financed with your lender.
Worked Example
Example: You're buying a $35,000 car with a $7,000 down payment, 6% interest, 60-month (5-year) loan.
- Loan Amount: $28,000
- Monthly Rate: 6% ÷ 12 = 0.5%
- Number of Payments: 60
- Monthly Payment: $541.32
- Total Paid: $32,479.20
- Total Interest: $4,479.20
Reconciliation: $541.32 × 60 months = $32,479.20 total paid. $32,479.20 − $28,000 loan = $4,479.20 interest.
To see how different interest rates affect the payment, use the calculator to compare scenarios with different rates entered.
How to Use This Calculator
Factors Affecting Auto Loan Rates: Auto-loan rates vary by borrower, lender, loan term, vehicle, market conditions, credit profile, employment history, down payment size, and other underwriting factors. No universal rate range applies across all borrowers or lenders.
- Loan Term: Loan term choices affect both your monthly payment and total interest. Shorter terms result in higher payments but lower total interest.
- Down Payment: A larger down payment reduces the amount financed, which lowers your monthly payment and total interest cost.
- Vehicle Choice: The vehicle you select, its condition, age, mileage, and market value all affect loan underwriting and potential rates.
Affordability: Affordability depends on your income, existing debts, insurance, fuel, maintenance, taxes, registration, and other expenses. Total transportation costs should fit within your overall budget. Consult a financial advisor for personal guidance.
Frequently Asked Questions
What is a good down payment for a car?
A larger down payment reduces the amount you finance, which lowers your monthly payment and total interest cost. Down payment size, vehicle price, depreciation, financed fees and taxes, and loan terms all affect whether you have equity in your vehicle. Consult with a lender about down payment options.
How long should I finance a car?
Shorter terms (36-48 months) save interest but have higher payments. Longer terms (60-72 months) lower payments but cost much more in interest. Choose a term where the monthly payment fits your budget while minimizing total interest.
Should I buy new or used?
Both new and used cars have tradeoffs. Purchase price, depreciation, financing terms, repair costs, warranty coverage, mileage, and vehicle condition all affect total ownership cost. Use this calculator to compare payment scenarios, and consider warranty and repair costs when evaluating total value.
Can I refinance my auto loan?
Refinancing is possible if you qualify for better terms. Whether refinancing reduces total cost depends on the remaining balance, new rate, remaining term, refinancing fees, and how the new loan is structured. Compare total costs carefully before refinancing.
What about loan gap insurance?
Gap insurance covers the difference between what you owe on your loan and your vehicle's value if it's totaled. Whether it's useful depends on the difference between the amount owed and the vehicle's market value, depreciation, financed fees and taxes, your down payment, and policy terms. Ask your lender about gap insurance options.