Auto Loan Calculator
Calculate car loan payments and total cost
Monthly Payment
$586.98
Amount Financed
$30,000
Total Interest Paid
$5,219
Total Financing Cost
$40,219
Visualization
Loan Balance Over Time
- Remaining Balance
- Principal Paid
Original Loan
$30,000
Total Interest
$5,219
Total Paid
$35,219
Results are estimates and may vary based on lender terms and fees.
Results are estimates for informational purposes only and do not constitute financial advice. Actual results may vary based on lender terms, fees, and other factors.
Auto Loan Calculator Formula
This loan payment formula calculates your monthly car payment. P is the amount financed (vehicle price minus down payment and trade-in value), r is the monthly interest rate, and n is the number of monthly payments. The calculation determines the fixed payment needed to fully repay the loan.
How the Auto Loan Calculator Works
- 1Enter the vehicle purchase price
- 2Subtract your down payment and any trade-in value to get the amount financed
- 3Input the auto loan interest rate (new cars typically get lower rates)
- 4Select the loan term (36-72 months are most common)
- 5View your monthly payment and total financing cost
Auto Loan Calculator Key Terms
- Amount Financed
- The total you're borrowing after subtracting down payment and trade-in value from the vehicle price.
- Trade-In Value
- The credit you receive for your current vehicle when purchasing a new one. Reduces the amount you need to finance.
- Negative Equity
- When you owe more on your current car than its trade-in value. This amount may be added to your new loan.
- Gap Insurance
- Covers the difference between your loan balance and the car's value if it's totaled or stolen.
Auto Loan Calculator Tips
- •Aim for a loan term of 48 months or less to avoid being underwater on the loan
- •New car rates are typically 2-3% lower than used car rates
- •Get pre-approved from your bank or credit union before visiting dealerships
- •Negotiate the vehicle price separately from financing terms
- •A larger down payment protects against depreciation and reduces interest costs
When to Use This Auto Loan Calculator
- ✓Budgeting for a new or used vehicle purchase
- ✓Comparing dealer financing versus bank/credit union loans
- ✓Determining if you can afford a specific vehicle
- ✓Understanding how term length affects total cost
- ✓Calculating the impact of trade-in or down payment amounts
Auto Loan Calculator Examples
New Car Financing
Financing $30,000 at 5.9% over 5 years costs $580 monthly, with $4,796 total interest paid.
Used Car with Trade-In
A $22,000 used car with $6,000 trade-in means financing $16,000. At 7.5% over 4 years: $387/month.
Short-Term Auto Loan
A 36-month term has higher payments ($744) but saves $1,200 in interest compared to 60 months.
Understanding Auto Loan in Depth
Auto financing represents the second-largest loan most Americans take on after mortgages. Making informed decisions about car loans can save thousands of dollars and prevent the common trap of being "upside down" on your vehicle.
The Depreciation Factor
Unlike homes, cars depreciate rapidly—losing 20-30% of value in the first year and 15-18% each subsequent year. This is why loan term matters so much. A 72-month loan often leaves you owing more than the car is worth for years, creating financial risk if you need to sell or the car is totaled.
New vs. Used Vehicle Financing
New cars offer lower interest rates and manufacturer incentives but suffer the steepest depreciation. A 2-3 year old certified pre-owned vehicle often provides the best value—letting the first owner absorb major depreciation while you get a nearly-new car with remaining warranty coverage.
The 20/4/10 Rule
Financial advisors recommend: 20% down payment, 4-year maximum term, and total transportation costs (payment plus insurance plus fuel) under 10% of gross income. This guideline helps ensure your car purchase remains affordable.
Dealer Financing vs. Bank Loans
Always get pre-approved from your bank or credit union before visiting dealerships. This gives you a baseline rate to compare against dealer offers. Sometimes dealers offer promotional rates (0-2.9%) that beat banks, but these often require giving up manufacturer rebates. Calculate both options.
Auto Loan Calculator FAQs
Browse more tools in Loan Calculators
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Marcus Chen
Financial Analysis SpecialistMarcus has over 12 years of experience in quantitative finance and personal financial planning. He specializes in loan analysis, investment modeling, and consumer debt strategies. His methodologies incorporate industry-standard financial mathematics used by major lending institutions.
Editorial Standards: All calculations use industry-standard financial formulas. Content is reviewed for mathematical accuracy and updated to reflect current market conditions. This tool provides estimates for informational purposes and does not constitute financial advice.