How to Use the Auto Loan Calculator
Enter the vehicle's sticker price, your down payment, any trade-in value, your local sales tax rate, the loan term, and the APR. The calculator instantly shows your monthly payment, total interest paid, and a full amortization schedule.
Understanding Your Auto Loan Payment
Your monthly auto loan payment is determined by the loan amount (vehicle price + taxes − down payment − trade-in), the interest rate (APR), and the loan term. Even a 1% difference in APR on a $30,000 loan over 60 months changes your payment by about $14/month — and saves $840 in total interest.
Should I Choose a Longer or Shorter Loan Term?
Longer terms (72–84 months) lower your monthly payment but significantly increase total interest paid. A $30,000 loan at 7% APR: 48-month term = $718/month, $4,464 interest. 72-month term = $512/month, $6,864 interest — $2,400 more. You also risk going "underwater" (owing more than the car is worth) for longer with extended terms.
The True Cost of That Car
Most buyers focus on the monthly payment. The smarter approach is to look at the total cost of the loan: monthly payment × term months + sales tax + registration fees. On a $35,000 car with 7% APR over 72 months, the "true cost" is about $42,000 before maintenance and insurance.
Frequently Asked Questions
Car payments use the same amortization formula as mortgages: M = P × [r(1+r)^n] / [(1+r)^n − 1], where P is the loan amount, r is the monthly APR, and n is the number of monthly payments.
As of 2026, average new car loan rates range from 5%–9% depending on credit score. Buyers with excellent credit (750+) can qualify for rates as low as 3%–5%. Used car rates are typically 1%–3% higher.
Longer terms (72–84 months) lower monthly payments but cost significantly more in interest. A 48-month loan typically costs 30%–40% less in total interest than a 72-month loan for the same amount.
Experts recommend putting down at least 20% on a new car and 10% on a used car. A larger down payment reduces your loan amount, monthly payment, and risk of being "underwater" on the loan.
Your trade-in value is subtracted from the vehicle purchase price before calculating your loan amount. If you owe more on your trade-in than it is worth (negative equity), that amount gets added to your new loan.
Sales tax (typically 4%–10%), registration fees, documentation fees, and dealer fees are often rolled into the loan amount. Our calculator includes sales tax estimation.
Most auto loans have no prepayment penalty, so paying extra reduces principal and saves interest. Even one extra payment per year can significantly shorten your loan term.
GAP (Guaranteed Asset Protection) insurance covers the difference between what your car is worth and what you owe on the loan if the car is totaled. It is most important when you have a small down payment or long loan term.
New car loans typically carry lower interest rates (often 1%–3% lower) than used car loans. However, new cars depreciate faster, which can put you underwater on the loan quickly.
The 20/4/10 rule suggests: 20% down payment, finance for no more than 4 years, and keep total car expenses under 10% of gross monthly income. This keeps car ownership affordable.