Comprehensive Guide
Learn more in our Loans & Mortgage Guide.
How it works
auto loan calculator takes your inputs and produces monthly payment, total interest, total cost of loan, payoff time. Monthly payment and full cost for a car loan, with the trade-in and down payment built in, plus an extra-payment option. You provide 5 inputs: Vehicle price (currency, in dollars) (default: 32000 dollars); Down payment + trade-in (currency, in dollars) (default: 6000 dollars); Annual interest rate (percent, in percent) (default: 6.9 percent); Loan term (years, in years) (default: 5 years); Extra monthly payment (currency, in dollars) (default: 0 dollars). The calculator returns 4 outputs: Monthly payment (the primary result); Total interest (a secondary output); Total cost of loan (a secondary output); Payoff time (a supplementary figure). Loans and mortgages are amortized instruments where the split between interest and principal shifts every month. Understanding the total cost of borrowing — not just the monthly payment — is the difference between a sustainable debt load and one that erodes your net worth over time. This calculator reveals the full amortization picture. The underlying formula: Principal = price - down payment - trade-in | M = P x r(1+r)^n / ((1+r)^n - 1) With the default values, monthly payment is computed from the interaction of every input field — change any one of them and the result updates immediately, so you can stress-test different scenarios without re-entering the whole form. Adjust the inputs to match your real financial situation. The defaults are realistic starting points, but every person's circumstances differ — your actual income, expenses, rates, and timelines will produce a different answer. Use the tool iteratively: start with the defaults, then change one variable at a time to see which factor has the largest impact on your outcome.Formula
Principal = price - down payment - trade-in | M = P x r(1+r)^n / ((1+r)^n - 1)
Tips
- Zero-percent financing is a free loan — stretch it to the max term; a 6.9% loan should be paid as fast as possible.
- Extra payments on a 6%+ auto loan are a guaranteed return no savings account matches.
- Arrange financing before visiting the dealer; floor financing is priced to profit, not to you.
- A shorter term (48-60 months) beats a lower rate promotion on a longer term in almost every total-cost comparison.
Frequently asked questions
What is a good auto loan rate?
With excellent credit, 0-2% through manufacturer incentives and 4-7% through banks and credit unions; used-car loans run a couple of points higher. Rates shift with the Fed, so compare current offers — this calculator uses your actual rate either way.
Should I get a longer loan term for a lower payment?
Longer terms lower the payment but raise total interest and keep you underwater longer. A 7-year loan at 7% on a typical car still costs thousands more than a 5-year. Take the longest term only when the rate is near zero — otherwise pay it down faster than the schedule.
Can I pay off an auto loan early?
Almost always, without penalty — auto loans are simple-interest loans: the earlier you pay principal, the less interest accrues. Some dealers' programs discourage early payoff for commission reasons, but the contract rarely prohibits it.
How much should I put down on a car?
Enough that you are never underwater: 10-20% down on a new car, or the gap between the price and cash value for a used one. A $500 monthly payment on a $30,000 car that depreciates 20% in year one is a recipe for negative equity.