Auto Loan Calculator

Buying a car? Know your payment before you walk into the dealership. This auto loan calculator gives you your exact monthly payment in seconds — so you're negotiating from strength, not guessing.

How to Use This Calculator

1. Enter the vehicle price.
2. Enter your down payment amount.
3. Enter any trade-in value and amount owed on trade-in.
4. Enter your state's sales tax rate.
5. Enter the loan interest rate (APR).
6. Select the loan term (24, 36, 48, 60, 72, or 84 months).
7. Click Calculate to see your monthly payment and total loan cost.

Auto Loan Formula

Same as a mortgage: M = P × [r(1+r)ⁿ] / [(1+r)ⁿ – 1] where P = financed amount, r = monthly rate, n = months.

Example Calculation

Car price: $35,000 | Down: $5,000 | Trade-in: $3,000 | Tax: 6% | Rate: 7.5% | 60 months

• Amount financed: ($35,000 − $5,000 − $3,000) × 1.06 = $28,620
• Monthly payment: ≈ $572
• Total paid: $34,320 | Total interest: $5,700

Shorter vs. Longer Loan Terms

• 36 months: Higher payment, least interest, own it free and clear faster.
• 60 months: Balanced payment and interest cost — most popular term.
• 84 months: Lowest payment, but most interest. High risk of going "underwater" (owing more than car is worth).

Common Mistakes to Avoid

• Focusing only on monthly payment — Dealers can make any payment "affordable" by extending the term. Always look at total cost.
• Financing taxes and fees — Paying these upfront saves interest on money that provides no value.
• Not checking your credit score first — A difference of 100 credit score points can mean 3%–5% rate difference on a car loan.
• Accepting dealer financing without comparison — Get pre-approved from your bank or credit union before visiting the dealership.

Frequently Asked Questions

What is a good interest rate for a car loan?

As of 2025, excellent credit (750+) can get rates of 4%–6%. Average credit (650–700) typically sees 8%–12%. Rates above 15% should prompt you to improve credit before buying or buy a less expensive car.

Should I put more money down on a car?

Yes — a larger down payment reduces interest, lowers payment, and protects against depreciation. A new car loses 15%–25% of value in year one. Putting 10%–20% down helps avoid being underwater.

Can I pay off my car loan early?

Usually yes, with no penalty. Check your loan agreement. Early payoff saves all remaining interest and frees up cash flow.

What is GAP insurance?

Guaranteed Asset Protection insurance covers the difference between what you owe on the loan and the car's actual cash value if it's totaled or stolen. Useful if you financed with little down payment.

How does a trade-in work?

If you owe less than the trade-in value, the equity reduces your new car's financed amount. If you owe more ("negative equity"), that difference gets added to your new loan — making an already-depreciating situation worse.

Conclusion

The monthly payment isn't the only number that matters when financing a car. Look at total cost, interest paid, and how long you'll be making payments. Use this calculator to find the right combination of down payment and term for your budget.

Related: Auto Lease Calculator | Loan Calculator | Sales Tax Calculator | Interest Calculator