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Car Loan Calculator

Calculate your monthly car payment including down payment and trade-in value.

Inputs

$
$
$
6.0%
020
5 years
18

Results

Monthly Payment
$579.98
Loan Amount
$30,000
Total Interest
$4,799.04
Total Payment
$34,799.04

Disclaimer: This calculator provides estimates for informational purposes only. Results are not financial advice. Consult a qualified financial advisor for decisions about your specific situation. Actual rates, terms, and conditions may vary by lender and individual circumstances.

How Does the Car Loan Calculator Work?

The car loan calculator estimates your monthly auto payment based on the vehicle price, down payment, trade-in value, applicable sales tax, interest rate, and loan term. It shows the total cost of the vehicle including all financing charges, helping you understand the true price you pay beyond the sticker number. The calculator also helps you evaluate whether a longer loan term with lower payments is worth the additional interest cost. Since cars are depreciating assets, understanding total cost is critical to avoid being underwater on your loan, which means owing more than the car is worth.

How to Use This Calculator

Enter the vehicle price (sticker or negotiated price), your down payment amount, any trade-in value, the interest rate (APR), and loan term in months. The calculator shows your monthly payment, total interest paid, and total cost of the vehicle. Try different scenarios: compare a 48-month term versus 72-month, or see how a larger down payment reduces your monthly payment and total interest. A good approach is to find the shortest loan term where the monthly payment fits your budget.

Example Calculation

Tom wants to buy a $32,000 car. He has a $5,000 trade-in and can put $3,000 down. His credit union offers 5.9% APR for 60 months.

  1. 1Vehicle price = $32,000
  2. 2Down payment = $3,000, Trade-in = $5,000
  3. 3Loan amount = $32,000 - $3,000 - $5,000 = $24,000
  4. 4Interest rate = 5.9% APR for 60 months
  5. 5Monthly payment = $463
  6. 6Total of payments = $463 x 60 = $27,780
  7. 7Total interest = $27,780 - $24,000 = $3,780
  8. 8True cost of car = $32,000 + $3,780 interest = $35,780
Result: Tom's monthly payment is $463 for 60 months. He will pay $3,780 in interest, making the true total cost $35,780. If he chose 72 months instead, his payment drops to $398 but total interest rises to $4,685.

Understanding Your Results

The monthly payment is your fixed obligation for the loan term. Total interest shows the financing cost above the vehicle price. Compare different terms: shorter loans cost more monthly but save significantly on interest. The total cost figure is the true price of the car including financing. Compare this to the car's expected value at the end of the loan term to understand the real cost of ownership. A car depreciates roughly 15-20% in the first year and about 60% over 5 years.

Tips & Best Practices

  • ✓A 20% down payment helps you avoid being underwater on your loan from day one.
  • ✓Keep your car loan term to 48-60 months or less to minimize total interest.
  • ✓Get pre-approved from a bank or credit union before visiting the dealership for better negotiating power.
  • ✓Total monthly car costs (payment, insurance, fuel, maintenance) should stay under 15-20% of take-home pay.
  • ✓Consider certified pre-owned vehicles — they offer significant savings with manufacturer-backed warranties.
  • ✓Never finance add-ons (extended warranties, paint protection) into your loan — they increase your total cost and can put you underwater.

Frequently Asked Questions

What is a good interest rate for a car loan?▾
Current rates for new cars typically range from 4-7% for excellent credit (750+), 7-10% for good credit (700-749), and 10-15% for fair credit (650-699). Used car rates are typically 1-2% higher. Credit unions often offer the best rates, followed by banks, then dealership financing. If your rate exceeds 10%, consider improving your credit score before purchasing.
What does it mean to be underwater on a car loan?▾
Being underwater (or upside-down) means you owe more on the loan than the car is worth. This commonly happens with low or no down payments and long loan terms (72-84 months) because cars depreciate faster than you pay off the loan. It becomes a problem if you need to sell or trade in the vehicle, as you would need to cover the difference out of pocket.
Should I choose a shorter or longer loan term?▾
Shorter terms have higher monthly payments but save thousands in interest and reduce the risk of being underwater. A $25,000 loan at 6% costs $2,349 in interest over 36 months versus $4,799 over 72 months — more than double. Choose the shortest term where the payment fits comfortably in your budget, ideally 48-60 months.
How much car can I afford?▾
A common guideline is that total transportation costs (loan payment, insurance, fuel, maintenance) should not exceed 15-20% of your monthly take-home pay. If you take home $4,000/month, aim for total car costs under $600-800/month. Work backward from the affordable monthly payment to determine the maximum loan amount. Do not forget to budget for insurance, which can be $100-300/month depending on the vehicle.
Is it better to buy or lease?▾
Buying is generally better financially if you keep the car for 5+ years because you build equity and eventually have no payment. Leasing offers lower monthly payments and a new car every 2-3 years but you never own the asset and must stay within mileage limits. If you drive more than 12,000-15,000 miles per year, leasing is usually more expensive due to excess mileage charges.
By CalcMaven Editorial TeamLast Updated: February 2026

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Free Car Loan Calculator — Auto Payment Estimator | CalcMaven