Auto Loan Calculator

To use this auto loan calculator, follow these steps:

1. Enter the vehicle price, which is the total negotiated purchase price of the car before any down payment or trade-in. Be sure to include sales tax and any dealer fees if they are being rolled into the loan.
2. Enter your down payment amount. Financial experts recommend putting at least 20% down on a new car and 10% down on a used car to minimize negative equity risk.
3. Enter any trade-in value for your current vehicle. If you are not trading in a car, leave this at zero. Check Kelley Blue Book or Edmunds to estimate your trade-in value.
4. Input the annual interest rate (APR) offered by your lender. If you have not yet received a quote, use the default rate or check current average rates online for your credit score range.
5. Select a loan term from 24 to 84 months. The calculator offers six standard terms to compare.

Once you enter your inputs, the calculator instantly displays your monthly payment, total interest paid, total loan cost, and the financed loan amount. To find the best deal, try adjusting the term length and down payment to see how each change affects your total cost.

Tips for negotiating better rates: Get pre-approved by your bank or credit union before visiting the dealer so you have a baseline rate. Negotiate the vehicle price separately from the financing terms. Ask the dealer to match or beat your pre-approved rate. Check for manufacturer incentive rates, which can be as low as 0% to 2.9% on select new models. Finally, keep the loan term to 60 months or fewer to minimize interest and avoid negative equity.

An auto loan calculator is a financial tool that estimates your monthly car payment and total loan cost based on the vehicle price, down payment, trade-in value, interest rate, and loan duration. It uses the standard amortization formula employed by banks, credit unions, and dealerships to determine fixed monthly payments on vehicle financing.

Auto loans are the most common way Americans finance vehicle purchases, with the average new car loan exceeding $40,000 and the average used car loan around $26,000. Understanding the mechanics of auto lending is critical to avoiding overpaying. New car interest rates are typically lower than used car rates because new vehicles carry less risk for lenders. As of 2026, borrowers with excellent credit can secure new car rates between 5% and 6.5%, while used car rates often run one to two percentage points higher. Rates for borrowers with fair or poor credit can climb to 10% or more.

When shopping for financing, you have three primary options: dealer financing, which is convenient but may include a markup on the rate; bank loans, which offer competitive rates if you have an existing banking relationship; and credit union loans, which frequently offer the lowest rates because credit unions are nonprofit institutions. Getting pre-approved from a bank or credit union before visiting the dealership gives you negotiating leverage and a benchmark rate to compare against the dealer offer.

One of the biggest pitfalls in auto financing is the total cost trap. Dealers often focus the negotiation on the monthly payment rather than the total loan cost, which can lead buyers to accept longer terms that dramatically increase total interest. A $35,000 car financed at 6.5% for 84 months costs over $7,600 in interest, compared to roughly $3,400 for a 48-month term. Auto loan terms typically range from 36 to 84 months. Shorter terms mean higher monthly payments but far less interest and lower risk of negative equity. Longer terms reduce the monthly burden but increase the chance that you will owe more than the car is worth, a situation known as being underwater or upside down. Depreciation is the hidden cost of car ownership: a new car loses roughly 20% of its value in the first year and about 60% over five years, which is why financial experts recommend limiting loan terms to 60 months or less and putting at least 20% down on a new vehicle.

The auto loan monthly payment is calculated using the standard amortization formula, the same formula used for mortgages and other fixed-rate installment loans:

M = P × [r(1 + r)n] / [(1 + r)n − 1]

Where each variable is defined as follows:

The total interest paid over the life of the loan is calculated as:

Total Interest = (M × n) − P

This represents the difference between what you pay in total and what you originally borrowed. The total cost of the loan is simply:

Total Cost = M × n

This equals the sum of every monthly payment over the full loan term. Note that this formula assumes a fixed interest rate for the entire loan duration. If you have a variable-rate loan, the monthly payment and total interest will fluctuate as the rate changes. Also note that the formula does not include sales tax, registration fees, or dealer add-ons unless those costs are included in the vehicle price input. For the most accurate estimate, add any financed fees to the vehicle price before entering it into the calculator.

Example 1 — New Car at $35,000: You purchase a new sedan priced at $35,000 with a $7,000 down payment (20%), no trade-in, a 5.9% interest rate, and a 60-month loan term. The financed amount is $28,000. Using the amortization formula, your monthly payment is approximately $541. Over 60 months, you pay a total of $32,460, meaning $4,460 goes to interest. This is a solid financing scenario because the 20% down payment protects you from negative equity, and the 5-year term keeps total interest manageable. By the time the loan is paid off, the car is worth roughly $14,000 to $16,000, so you maintain positive equity throughout.

Example 2 — Used Car at $18,000: You buy a 3-year-old used SUV for $18,000 with a $2,000 down payment, a $3,000 trade-in from your old car, a 7.5% interest rate (typical for used cars), and a 48-month term. The loan amount is $13,000. Your monthly payment works out to approximately $314. Total payments over 48 months equal $15,072, so you pay $2,072 in interest. Used car loans often carry higher rates, but the shorter term and lower principal keep total interest well under control. The key advantage of buying used is that the steepest depreciation has already occurred, so the vehicle retains a larger percentage of its value during your ownership period.

Example 3 — Comparing 48-Month vs. 72-Month Terms: To illustrate the impact of loan term on total cost, consider a $30,000 loan at 6.5% interest. With a 48-month term, the monthly payment is $711 and total interest paid is $4,128, for a total cost of $34,128. With a 72-month term, the monthly payment drops to $507, but total interest climbs to $6,504, making the total cost $36,504. The longer term saves $204 per month but costs an extra $2,376 in interest over the life of the loan. Worse, at the 48-month mark the 72-month borrower still owes about $11,500 on a car that may be worth only $12,000 to $13,000, creating a razor-thin equity margin. This example demonstrates why shorter terms are almost always the better financial choice when the monthly payment is affordable.