Auto Loan Calculator

Estimate your monthly payment, total interest and true cost for a new or used car loan.

Monthly payment
$528
Total interest
$4,697
Total paid
$31,697

How this calculation works

An auto loan works like a miniature mortgage: it uses the standard amortization formula M = P · r / (1 − (1 + r)⁻ⁿ), where P is the financed principal (price − down payment − trade-in), r is the monthly rate and n is the number of months. The payment is fixed; early on more of it goes to interest, and that ratio flips over time. Dealers often frame the monthly payment as if it were the only number that matters, but the real figures are the total cost of credit and the effective APR.

Worked example

A $30,000 car, $3,000 down, no trade-in, financed at 6.5% for 60 months yields about $587/month. You will pay roughly $5,200 in interest and about $35,200 total. Stretch the term to 72 months and the payment drops to ~$509 but interest climbs above $6,200. Shorter terms almost always win on total cost.

Common mistakes

  • Focusing only on the monthly payment. Stretching the term lowers the payment but explodes the interest. Always compare total paid.
  • Ignoring depreciation. A car loses 15%–25% of its value in the first year. With long terms you can owe more than the car is worth (negative equity).
  • Skipping GAP insurance. It covers the difference between the loan balance and the car's value in a total-loss claim. Useful with small down payments and long terms.
  • Accepting dealer add-ons without shopping. Insurance, maintenance packs and extended warranties are usually cheaper elsewhere.
  • Forgetting recurring costs. Insurance, fuel, maintenance and taxes typically add $200–$400/month on top of the loan.

Frequently asked questions

How much should I put down? At least 20% of the price to avoid negative equity in the first year.

Is 60 or 72 months better? 60 months is the reasonable ceiling. Beyond 72–84 months you pay much more interest and are likely to still owe money when the car has lost most of its value.

Bank or dealer financing? Always compare APR, not just the rate. Dealers may offer 0% promos but recoup them by raising the vehicle price.

Should I pay off early? If the rate is above 5% and you have no more expensive debt, yes. Check any prepayment penalty first.

What about paying cash? If you have the cash and the APR is above 4%, paying cash usually wins. With very low promo rates, financing and keeping the cash invested can be better.

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