Auto Loan Calculator

The monthly payment uses the standard amortization formula: M = P[r(1+r)^n] / [(1+r)^n - 1], where P is the loan amount (price minus down payment minus trade-in), r is the monthly interest rate, and n is the total number of payments. This gives you a fixed monthly payment that covers both principal and interest.

A larger down payment reduces the amount you borrow, lowering both your monthly payment and total interest paid. Putting 20% down on a $30,000 car saves thousands in interest compared to financing the full amount. It also reduces the risk of being "underwater" (owing more than the car is worth).

Common terms are 36, 48, 60, and 72 months. Shorter terms have higher monthly payments but much less total interest. A 36-month loan at 6% on $25,000 costs $3,000 less in total interest than a 72-month loan. Financial advisors generally recommend 48-60 months maximum to avoid excessive depreciation risk.

Rates vary by credit score, loan term, and whether the car is new or used. In 2025, excellent credit (750+) can secure 4-6% for new cars. Good credit (670-749) typically sees 6-9%. Used car rates are usually 1-2% higher. Always compare rates from banks, credit unions, and dealer financing.

The calculator focuses on the loan amount and interest. To include sales tax and fees, add them to the vehicle price or enter the total out-the-door price as the loan amount. Common additional costs include sales tax (varies by state), registration, title, documentation, and dealer fees.