Auto Loan Calculator

Auto Loan Calculator

Calculate monthly car loan payments and total interest instantly.

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Quick Tips
  • Negotiate the out-the-door price first, then shop financing separately — dealers often make more profit on the loan than the car.
  • A shorter loan term means a higher payment but meaningfully less total interest paid.
  • Get pre-approved by a bank or credit union before visiting the dealer, so you have a rate to compare against.
  • A larger down payment reduces both your loan amount and the risk of owing more than the car is worth.

Monthly Payment

$478
Loan Amount
$25,000
Total Interest
$3,652
YearPrincipalInterestBalance
Vehicle Price
$25,000
Down Payment
$0 (0%)
Total Cost
$28,652

Last updated: August 10, 2026

Auto Loans: What Dealers Don't Tell You

Average new car loan in 2024: $40,000 at 7.5% APR for 72 months = $686/month. You'll pay $49,392 total—$9,392 in interest alone. Extend to 84 months and that same loan costs $51,576 ($11,576 interest). Every year added costs thousands.

Three numbers matter: price, rate, and term. Negotiate price first (dealers make profit here), then rate (shop banks before visiting dealer), finally term (shorter = less interest). The "what's your monthly payment?" question is designed to hide the total cost. Focus on out-the-door price instead.

Interest Rate Ranges (2024)

Credit Score New Car APR Used Car APR $30K/60mo Payment
720+ (Excellent) 5.5-6.5% 7.0-8.5% $581
660-719 (Good) 7.0-9.0% 9.5-12% $604
620-659 (Fair) 10-14% 14-18% $649
Below 620 (Poor) 14-20% 18-25% $713

Pro tip: Check your credit score before shopping. Improving from 650 to 720 saves $1,440 in interest on a $30K loan.

The Real Cost of Longer Terms

48 Months
$35K at 7% APR
$837/mo
Total: $40,176
Interest: $5,176
60 Months
$35K at 7% APR
$693/mo
Total: $41,580
Interest: $6,580
84 Months
$35K at 7% APR
$524/mo
Total: $44,016
Interest: $9,016
Warning: 84-month loans mean you're underwater for years. Car depreciates faster than you pay principal—you owe more than it's worth. Limits trade-in options.

New vs Used: The Real Math

New Car ($40K)

  • Price: $40,000
  • APR: 6.5% (60 months)
  • Payment: $782/month
  • Total paid: $46,920
  • Interest: $6,920

Year 5 value: ~$20,000 (50% depreciation)

3-Year-Old Used ($25K)

  • Price: $25,000
  • APR: 8.0% (48 months)
  • Payment: $610/month
  • Total paid: $29,280
  • Interest: $4,280

Year 5 value: ~$17,000 (saves $17,640)

Down Payment Impact

0% Down

$30K car, 7% APR, 60 months

Payment: $594/month

Total interest: $5,640

Underwater for 3 years

20% Down ($6K)

$30K car, 7% APR, 60 months

Payment: $475/month

Total interest: $4,512

Saves $1,128 in interest

Rule: 20% down minimum avoids negative equity and often qualifies for better rates.

Smart Shopping Strategy

Do This

  • Get pre-approved from bank/credit union before dealer visit
  • Negotiate out-the-door price, not monthly payment
  • Keep loan term to 48-60 months max
  • Put down 20% or more to avoid negative equity
  • Consider certified pre-owned (CPO) for warranty + lower price
  • Calculate total cost, not just monthly payment

Avoid This

  • Telling dealer your max monthly payment (they'll hit that number with worse terms)
  • Rolling negative equity from trade-in into new loan
  • Dealer add-ons (extended warranties, paint protection, GAP insurance at inflated prices)
  • Loans over 60 months (you'll be underwater too long)
  • Signing same day—sleep on it and review paperwork carefully

Frequently Asked Questions

2024 rates:

Excellent credit (720+): 5.5-6.5% new, 7-8.5% used

Good credit (660-719): 7-9% new, 9.5-12% used

20/4/10 rule:

20% down payment

4-year loan maximum

Total car expenses under 10% of gross income

Used (2-3 years old) is usually smarter:

Saves 30-40% vs new

Someone else paid the depreciation

48-60 months max

Avoid 72-84 month loans—you'll be underwater (owe more than car's worth) for years

Minimum 20% for new cars

10-15% acceptable for used

Prevents negative equity and lowers interest costs

Get pre-approved first from bank/credit union

Use it as leverage—dealers may beat it, but you have backup

Usually yes, but check for prepayment penalties

Most loans allow early payoff without fees—saves interest

Don't roll negative equity into new loan

Keep current car longer or sell privately to pay difference

Usually no:

Extended warranties: overpriced, buy from manufacturer if needed

GAP insurance: buy from own insurer for 50% less

Lease only if: Write off for business, want new car every 3 years

Buying is cheaper long-term—you own the car after payoff

How we calculate this

Method
Standard amortizing loan payment
Formula
M = P × i(1 + i)ⁿ ÷ ((1 + i)ⁿ − 1) applied to the financed amount after deposit and trade-in
Source
The standard closed-form annuity payment formula for fully amortizing fixed-rate loans.
Limitations
Dealer fees, taxes and gap insurance are excluded unless entered. Advertised APRs often assume a credit profile you may not match.
Last reviewed

Found a discrepancy? Tell us and we will check it — corrections are published on this page. Report an issue

Frequently Asked Questions

It uses the standard loan amortization formula: your vehicle price plus sales tax, minus your down payment and trade-in value, becomes your loan amount. That amount is then spread across your loan term at your interest rate, so each payment covers both interest on the remaining balance and a portion of the principal.

Negotiate the out-the-door price first — that's where dealers have the most room and the most incentive to keep you focused on a low monthly number instead. A dealer can make a low payment "work" by stretching the loan term, which often costs you more in total interest even if the payment looks attractive.

Yes — a pre-approval from a bank or credit union gives you a real interest rate to compare against, and negotiating leverage if the dealer's financing offer isn't competitive. You can always take the dealer's financing instead if it turns out to be better.

Significantly. A shorter term (e.g. 48 months instead of 72) raises your monthly payment but can cut total interest paid substantially, since you're borrowing the money for less time. Try adjusting the loan term slider to see the trade-off directly.

Generally yes for reducing what you owe and how much interest accrues, and it also reduces the risk of being "underwater" (owing more than the car is worth) in the loan's early months, since cars depreciate quickly. That said, keeping some emergency savings on hand matters too — it's a balance, not an absolute rule.

Your trade-in's value is subtracted from the total vehicle cost, directly reducing the amount you need to finance — functionally similar to an additional down payment. Make sure you know your trade-in's real market value beforehand so you're not accepting a lowball offer baked into the deal.

Sales tax is typically calculated on the vehicle price and then financed along with everything else (unless you pay it separately upfront), so it increases your loan amount and therefore your payment. The rate varies significantly by state and even by county, so enter your actual local rate for an accurate estimate.

Auto loan rates vary widely based on your credit score, the loan term, and whether the car is new or used - used car loans and longer terms typically carry higher rates. Check your latest credit score and shop multiple lenders, since rates for the same borrower can vary meaningfully between banks and credit unions.

The calculator's math is the same either way, but used car loans commonly carry higher interest rates and sometimes shorter maximum terms than new car loans, since lenders view used vehicles as higher risk. Factor a realistic used-car rate into your comparison rather than assuming the same rate as a new car offer.

It means no interest is charged over the loan's life — every payment goes entirely toward principal. These offers are usually only available on new vehicles with strong credit, and manufacturers sometimes offer a choice between 0% financing or a cash rebate, which isn't always the same value.

Most auto loans allow early payoff without penalty, but check your specific loan agreement — a small number of loans include prepayment penalties. Paying extra toward principal (even irregularly) reduces total interest since interest is calculated on the remaining balance each period.

A commonly cited guideline suggests keeping total vehicle costs (payment, insurance, fuel, maintenance) under about 15-20% of take-home pay, with the payment itself often targeted around 10%. These are general guidelines, not fixed rules — your own budget and other obligations matter more than any single percentage.

It can, especially if your credit score has improved since you took out the original loan, or if rates have dropped. Refinancing replaces your current loan with a new one, ideally at a lower rate — run the numbers with this calculator using the new rate and remaining balance to see if it actually saves money after any fees.

Amortized loans front-load interest because it's calculated on the current balance, which is highest at the start. As the balance shrinks with each payment, more of each subsequent payment goes toward principal — the same pattern you'd see in a mortgage or personal loan amortization schedule.

These products can be worthwhile, but dealers often mark them up significantly and roll the cost into your loan, meaning you pay interest on the warranty itself. If you want one, price-compare with third-party providers before financing it through the dealer.

If you owe more than your trade-in is worth, that negative equity typically gets added to your new loan amount, increasing what you finance and often stretching the term. It's usually better to pay down the difference in cash if possible, rather than rolling it into a new, larger loan.

Yes — use "Copy Link" to get a URL that encodes your exact inputs, or export the full amortization schedule as PDF, CSV, Excel, or JSON using the buttons below your results.

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