Free Tool

Car Loan Calculator

Find your exact monthly auto payment, total interest, and full cost of financing before you sign anything.

Loan Details

$
$
%
mo

Results

Enter your details and hit Calculate

What is a Car Loan?

A car loan (also called an auto loan) is a secured installment loan that finances the purchase of a vehicle. The lender provides the full purchase amount upfront, and you repay it in equal monthly payments over a set term — typically 36, 48, 60, or 72 months — with interest.

Your monthly payment depends on three things: the loan amount (vehicle price minus down payment), the annual percentage rate (APR), and the loan term. A larger down payment reduces the loan amount and therefore your monthly payment and total interest paid. A shorter loan term means higher monthly payments but significantly less interest over the life of the loan.

Understanding the full cost of an auto loan before you visit a dealership puts you in a much stronger negotiating position. Many buyers focus only on the monthly payment, which lets dealers inflate the total cost with extended terms or hidden fees.

Car Loan Payment Formula

Monthly car loan payments are calculated using the standard amortization formula:

M = P × r(1 + r)n(1 + r)n − 1
  • M — Monthly payment amount.
  • P — Principal (vehicle price minus down payment).
  • r — Monthly interest rate (annual APR ÷ 12 ÷ 100).
  • n — Total number of monthly payments (loan term in months).
  • Total Cost — M × n + down payment.

Example: $30,000 Car with $5,000 Down

You're buying a $30,000 vehicle with a $5,000 down payment, leaving a loan amount of $25,000. Here's how different terms and rates compare at 6.5% APR:

TermMonthly PaymentTotal InterestTotal Cost
36 months$766$2,577$27,577
48 months$593$3,460$28,460
60 months$489$4,332$29,332
72 months$421$5,281$30,281

A 36-month loan saves over $2,700 in interest compared to a 72-month loan, but costs $345 more per month. The right choice depends on your cash flow — but always avoid extending the term just to lower the payment if you can manage the higher amount.

Calculations based on $25,000 loan amount at 6.5% APR. For illustrative purposes only.

Frequently Asked Questions

What is a good car loan interest rate?

Car loan rates vary by credit score, lender, loan term, and whether the vehicle is new or used. In 2024–2025, average new car loan rates ranged from about 5–8% for borrowers with good credit (700+). Used car rates tend to be 1–3% higher. Credit unions often offer lower rates than dealership financing. Always get pre-approved from a bank or credit union before visiting a dealership.

How much should I put down on a car?

Financial experts typically recommend a down payment of at least 10–20% of the vehicle's purchase price. A larger down payment reduces your loan balance, lowers monthly payments, reduces total interest paid, and helps you avoid being "underwater" on the loan (owing more than the car is worth). For new cars, 20% down is a common benchmark.

Is it better to finance or pay cash for a car?

Paying cash eliminates interest entirely and simplifies ownership. However, if you can invest the cash at a return higher than your loan APR, financing can make mathematical sense. For example, if you can get a 3% auto loan and your investments return 7%, keeping the cash invested and financing the car earns you 4% on that money. In practice, most people benefit from paying as large a down payment as practical while keeping an emergency fund.

What is included in the total cost of a car loan?

This calculator shows principal plus interest. In reality, the true cost of vehicle ownership also includes sales tax, registration fees, insurance, fuel, and maintenance. When budgeting for a car purchase, plan for total transportation costs — not just the loan payment.

function resetCalc() { document.querySelectorAll('.field-grid input, .field-grid select').forEach(function(el) { el.value = ''; }); var p = document.getElementById('placeholder'); var g = document.getElementById('resultsGrid'); if (p) p.style.display = ''; if (g) g.hidden = true; document.querySelectorAll('.result-value').forEach(function(el) { el.textContent = '—'; }); }