Auto Loan Calculator

About Auto Loan Calculator

Calculate the true cost of financing a car, truck, or SUV. Enter the vehicle price, down payment, trade-in value, sales tax rate, APR, and loan term to see your monthly payment, total interest, and a full amortization schedule showing exactly how each payment splits between principal and interest.

How Is a Car Payment Calculated?

The monthly payment uses the standard amortization formula:

M = P x r x (1 + r)^n / ((1 + r)^n - 1)

Where P is the amount financed, r is the monthly interest rate (APR / 12), and n is the number of monthly payments. The amount financed equals the vehicle price plus sales tax, minus your down payment and trade-in value.

Worked example: $30,000 car, 10% down ($3,000), $5,000 trade-in, 6% state sales tax, 6.5% APR, 60 months:

• Taxable amount (most states tax price minus trade-in): $30,000 - $5,000 = $25,000
• Sales tax: $25,000 x 6% = $1,500
• Amount financed: $30,000 + $1,500 - $3,000 - $5,000 = $23,500
• Monthly rate: 6.5% / 12 = 0.5417%
• Monthly payment: $460.16
• Total paid over 60 months: $27,609.60
• Total interest: $4,109.60

How Loan Term Affects Total Cost

Longer terms lower the monthly payment but increase total interest substantially. Here is a comparison for a $25,000 loan at 6.5% APR:

Term	Monthly Payment	Total Interest	Total Cost
36 months	$766	$2,576	$27,576
48 months	$593	$3,464	$28,464
60 months	$489	$4,340	$29,340
72 months	$421	$5,312	$30,312
84 months	$372	$6,248	$31,248

Going from 36 to 84 months cuts the monthly payment nearly in half but adds $3,672 in interest. The 60-month term is the most popular balance between affordability and total cost.

What Interest Rate Should You Expect?

Auto loan rates vary significantly based on credit score, loan term, and whether the car is new or used. Typical ranges as of 2025 (source: Experian State of the Automotive Finance Market):

Credit Score	New Car APR	Used Car APR
781-850 (Super prime)	4.5 - 5.5%	5.5 - 7.0%
661-780 (Prime)	5.5 - 7.5%	7.0 - 9.5%
601-660 (Near prime)	8.0 - 11.0%	10.0 - 14.0%
501-600 (Subprime)	11.0 - 14.0%	14.0 - 18.0%
300-500 (Deep subprime)	14.0 - 20.0%	18.0 - 22.0%

Always get pre-approved from your bank or credit union before visiting a dealership. Dealer financing is convenient but typically 1-2% higher than what you can get directly. Having a pre-approval also gives you negotiating leverage.

The Down Payment and Trade-In

A down payment reduces the amount financed, lowering both your monthly payment and total interest. It also helps you avoid being "upside down" (owing more than the car is worth), which can happen quickly because cars depreciate 15-25% in the first year.

Rule of thumb: Put at least 20% down on a new car and 10% on a used car. For a $30,000 new car, that means $6,000 down. For a $15,000 used car, $1,500.

Your trade-in works like a down payment. In most US states, you only pay sales tax on the difference between the new car price and trade-in value. On a $30,000 car with a $10,000 trade-in at 6% tax, you save $600 in sales tax compared to selling privately and paying tax on the full price.

How the Amortization Schedule Works

The amortization table shows every monthly payment split between principal and interest. Early in the loan, most of each payment goes to interest. By the end, nearly all goes to principal.

Example for $25,000 at 6.5%, 60 months ($489/month):

Payment	Principal	Interest	Balance
Month 1	$353	$135	$24,647
Month 12	$378	$111	$20,155
Month 30	$418	$71	$12,731
Month 48	$462	$27	$4,583
Month 60	$486	$3	$0

New vs Used: The Real Cost Comparison

Used cars cost less upfront but carry higher interest rates and may need more maintenance. A rough comparison:

	New Car ($35,000)	3-Year-Old Used ($22,000)
Down payment (20%/10%)	$7,000	$2,200
Amount financed	$28,000	$19,800
APR	5.5%	7.5%
Term	60 months	48 months
Monthly payment	$535	$479
Total interest	$4,100	$3,192
Value at end of loan	~$14,000	~$10,000
Depreciation cost	$21,000	$12,000

The used car costs less overall because the steepest depreciation happens in years 1-3. Certified pre-owned (CPO) vehicles offer a middle ground with manufacturer-backed warranties.

Common Mistakes When Financing a Car

• Focusing only on monthly payment: Dealers stretch terms to 72-84 months to make payments seem affordable. Always look at total cost, not just the monthly number.
• Skipping the pre-approval: Walking into a dealership without a rate in hand means you accept whatever they offer. Get quotes from at least 2-3 lenders first.
• Negative equity rollover: Rolling the remaining balance from an old car loan into a new one means you start upside down immediately. Pay off the old loan first or sell the car privately.
• Extended warranties and add-ons: Dealerships make significant profit on extended warranties, paint protection, and gap insurance bundled into the loan. These add-ons increase your financed amount and total interest. Evaluate each one separately.
• Ignoring insurance costs: A newer or more expensive car costs more to insure. Get insurance quotes before committing to a purchase, especially for luxury or sports vehicles where premiums can exceed $200/month.

For a general-purpose loan breakdown, the loan calculator works with any fixed-rate loan. To figure out how much to save for your down payment, the down payment calculator helps you plan a savings timeline. For understanding the full amortization schedule of any loan, see the amortization schedule generator.

All calculations run in your browser. No financial data is stored or sent anywhere.