Auto Loan Calculator
Calculate your monthly car payment, total interest, and total cost for any auto loan — new or used.
What is an auto loan calculator?
An auto loan calculator shows what a car will actually cost per month once you finance it: the amount borrowed after your down payment, trade-in and sales tax, the monthly payment at your APR and term, the total interest, and the total you will pay over the life of the loan. Enter your numbers above and every figure updates at once.
Run it before you visit the dealership. Dealers negotiate on the monthly payment because a longer term can make an expensive car look affordable while adding thousands in interest; knowing your own numbers turns the conversation back to price, rate and term.
The same car, five loan terms
A $35,000 car with $5,000 down and 6.5% sales tax leaves $32,275 to finance. At 7.5% APR:
| Term | Monthly payment | Total interest | Total paid |
|---|---|---|---|
| 36 months | $1,003.95 | $3,867 | $36,142 |
| 48 months | $780.37 | $5,183 | $37,458 |
| 60 months | $646.72 | $6,528 | $38,803 |
| 72 months | $558.04 | $7,904 | $40,179 |
| 84 months | $495.04 | $9,309 | $41,584 |
Stretching from 48 to 84 months cuts the payment by $285 but costs $4,126 more in interest — and leaves you paying for a car that is seven years old at the end. Long loans also keep you "underwater" (owing more than the car is worth) for years, which matters if it is totalled or you need to sell.
What your credit score does to the rate
Approximate average APRs by credit tier, from Experian's quarterly automotive finance data (rates move with the market — treat these as relative, not exact):
| Credit tier (score) | New car APR | Used car APR | Payment on $32,275 / 60 mo |
|---|---|---|---|
| Super prime (781–850) | ~5% | ~7% | $609 – $639 |
| Prime (661–780) | ~6.5% | ~9% | $631 – $670 |
| Nonprime (601–660) | ~10% | ~14% | $686 – $751 |
| Subprime (501–600) | ~13% | ~19% | $734 – $837 |
| Deep subprime (300–500) | ~16% | ~21.5% | $785 – $882 |
The gap between prime and subprime on this loan is over $100 a month and $6,000 over five years. If your score is below 660, improving it for six months before buying — or bringing a co-signer — is worth more than any dealer discount.
How much car can you afford? The 20/4/10 rule
A widely used guideline: put 20% down, finance for no more than 4 years, and keep total car costs (payment, insurance and fuel) under 10% of gross income. On the $35,000 example that means $7,000 down, a 48-month loan and a payment of about $732 — which needs a gross income of roughly $88,000 before insurance and fuel. If the numbers do not fit, the rule says buy a cheaper car, not a longer loan. Most Americans do not follow it (the average new-car term is now around 68 months), which is a large part of why so many are underwater.
Down payment, trade-in and sales tax
A down payment reduces the loan and the interest, and keeps you from being underwater from day one — a new car loses roughly 20% of its value in the first year and 15% more in the second. A trade-in works like a down payment, with one bonus: in most states sales tax is charged on the price minus the trade-in. On the example, trading in a $5,000 car saves $325 in tax as well as reducing the loan, and the payment drops to about $540. A few states (California, Virginia and Hawaii among them) tax the full price regardless.
Dealer financing vs. your own pre-approval
Get a pre-approval from your bank or credit union before you shop. It tells you the rate you actually qualify for, gives you a ceiling on what you can spend, and forces the dealer to beat it rather than mark up the rate (dealers are allowed to add a margin to the rate a lender offers them). Manufacturer promotions — 0% or 1.9% financing — are genuinely cheap, but usually require excellent credit and mean giving up a cash rebate; run both options through the calculator to see which wins.
Formula
Amount financed = price + (price − trade-in) × sales tax rate − down payment − trade-in
Sales tax is applied to the price net of the trade-in, which is how most states tax vehicle purchases. Then the monthly payment uses the standard amortization formula:
Payment = P × r × (1 + r)n ÷ ((1 + r)n − 1)
- P = amount financed
- r = monthly rate = APR ÷ 12 ÷ 100
- n = number of monthly payments
Total paid = payment × n; total interest = total paid − P. At 0% APR the payment is simply P ÷ n. Dealer fees (documentation, title, registration) are not included — add them to the price if they are being financed.
Worked example
A $35,000 car, $5,000 down, no trade-in, 6.5% sales tax, 7.5% APR, 60 months:
- Sales tax: 35,000 × 6.5% = $2,275
- Amount financed: 35,000 + 2,275 − 5,000 = $32,275
- Monthly rate: 7.5 ÷ 12 ÷ 100 = 0.00625; n = 60
- Payment = 32,275 × 0.00625 × 1.0062560 ÷ (1.0062560 − 1) = $646.72
- Total paid = 646.72 × 60 = $38,803; total interest = $6,528
With a $5,000 trade-in in addition to the $5,000 cash: tax is charged on $30,000 ($1,950), the amount financed is $26,950, and the payment falls to $540.02.
After two years
Twenty-four payments into the 60-month loan, the balance is about $20,800 while the car is worth roughly $23,800 — just above water. On the 72-month version of the same loan the balance is about $23,100, essentially equal to the car's value, and on an 84-month loan you would still owe more than the car is worth.
How to use this calculator
- Enter the negotiated price of the car (the "out-the-door" price minus taxes, or add dealer fees here if they will be financed).
- Enter your cash down payment and the value of any trade-in.
- Enter your state's vehicle sales tax rate. Most states charge it on the price after the trade-in credit.
- Enter the APR you have been quoted or pre-approved for, and the loan term in months.
- Read the monthly payment, amount financed, total interest and total of all payments.
Questions to settle before you sign
- Price first, then financing. Agree the price of the car before discussing payments, trade-in or financing — mixing them lets the dealer move money between columns.
- Is there a prepayment penalty? Most auto loans have none, so paying extra shortens the loan and saves interest. Confirm in writing.
- Do you need GAP insurance? If you put down less than 20% or finance for more than 60 months, gap coverage pays the difference between what you owe and what the car is worth if it is totalled. It is usually cheaper from your insurer than from the dealer.
- Add-ons — extended warranties, paint protection, nitrogen tyres and VIN etching are high-margin extras rolled into the loan. Decline them at signing; you can buy a warranty later if you want one.
Related tools
- Car lease calculator — compare leasing with buying
- Car depreciation calculator — what the car will be worth in 1, 3 and 5 years
- Sales tax calculator — vehicle tax in your state
- Loan calculator — any fixed-rate loan
Frequently asked questions
How much should I put down on a car?
Twenty percent on a new car and at least 10% on a used one is the standard advice. A new car loses about 20% of its value in the first year, so a smaller down payment leaves you owing more than it is worth. On a $35,000 car, 20% is $7,000; every $1,000 more down saves roughly $200 in interest over a five-year loan at 7.5%.
Is a longer loan term a good idea?
Rarely. A 72- or 84-month loan lowers the payment but raises the total cost — $4,000 more interest than a 48-month loan on the example above — and keeps you underwater for years, which hurts if the car is totalled or you need to trade it in. If the only way to afford the payment is a term beyond 60 months, the car is too expensive.
Does the calculator include taxes and fees?
It includes sales tax, applied to the price net of any trade-in. It does not include dealer documentation fees, title, registration or add-ons; enter them as part of the price if they are being financed. Dealer "doc fees" range from under $100 in states that cap them to over $800 in states that do not.
Should I get pre-approved before going to the dealership?
Yes. A pre-approval from a bank or credit union shows the rate you qualify for, sets a realistic budget, and lets you treat dealer financing as a bid to beat rather than a take-it-or-leave-it offer. Dealers may mark up the rate a lender gives them; a competing pre-approval removes that room. Multiple auto-loan inquiries within about 14 days count as one for credit-scoring purposes, so shopping around does not hurt your score.
What credit score do I need for the best auto loan rate?
Around 780 and above (super prime) gets the lowest advertised rates; 661–780 (prime) qualifies for good rates at most lenders. Below 660 rates climb steeply, and below 600 they can exceed 15%–20%. Manufacturer promotional rates (0%–2.9%) typically require a score in the mid-700s or higher.
New or used: which is cheaper to finance?
Used cars cost less but carry higher rates — typically 2–5 percentage points more than new-car loans at the same credit tier — and shorter maximum terms. A two-to-three-year-old car usually wins on total cost because it has already taken the steepest depreciation, unless a manufacturer is offering 0%–2% financing on the new model.
Can I pay off my car loan early?
Almost always, and usually without penalty — check the contract for a prepayment clause. Extra payments go to principal and cut both the term and the interest: an extra $100 a month on the example loan pays it off about nine months early and saves roughly $1,050. Make sure extra amounts are applied to principal rather than counted as an early next payment.
What is negative equity and how do I avoid it?
Negative equity — being "underwater" or "upside down" — means you owe more than the car is worth. It comes from small down payments, long terms and fast depreciation, and it is a problem when the car is totalled (insurance pays its value, not your loan) or when you want to trade it in. Avoid it with a 20% down payment and a term of 60 months or less, or protect against it with GAP insurance.