Auto Loan Calculator
Calculate your monthly car payment, total interest, and see a full amortization schedule with trade-in and tax options.
Reference table
| Vehicle Price | Monthly Payment | Total Loan Amount | Total Interest Paid |
|---|---|---|---|
| 2,000 | $10.85 | $440.00 | $80.57 |
| 2,500 | $24.03 | $975.00 | $178.54 |
| 5,000 | $89.97 | $3,650.00 | $668.38 |
| 7,500 | $155.90 | $6,325.00 | $1,158.22 |
| 10,000 | $221.83 | $9,000.00 | $1,648.07 |
| 12,500 | $287.77 | $11,675.00 | $2,137.91 |
| 15,000 | $353.70 | $14,350.00 | $2,627.75 |
| 20,000 | $485.57 | $19,700.00 | $3,607.44 |
| 25,000 | $617.44 | $25,050.00 | $4,587.12 |
| 30,000 | $749.31 | $30,400.00 | $5,566.80 |
| 40,000 | $1,013.05 | $41,100.00 | $7,526.17 |
| 50,000 | $1,276.78 | $51,800.00 | $9,485.54 |
| 75,000 | $1,936.12 | $78,550.00 | $14,383.96 |
| 100,000 | $2,595.47 | $105,300.00 | $19,282.38 |
Smart Financing Tips
- Put at least 10–20% down to avoid being upside-down on the loan and reduce total interest.
- Keep your loan term to 60 months or less for new cars and 36 months for used to minimize interest.
- Get pre-approved by your bank or credit union before visiting the dealership for better negotiating power.
- Even $50–$100 extra per month toward principal can save hundreds in interest and cut months off your loan.
What Is an Auto Loan?
How Auto Loan Payments Are Calculated
Key Factors That Affect Your Auto Loan
- Credit Score: The single biggest factor in your interest rate. Excellent credit (750+) can save thousands compared to fair or poor credit over the life of a loan.
- Down Payment: Putting 10–20% down reduces your loan amount and prevents being underwater (owing more than the car is worth) from day one.
- Loan Term: Shorter terms (36–48 months) mean higher monthly payments but dramatically lower total interest. A 72-month loan can cost 50% more in interest than a 48-month loan.
- New vs Used: Used car loans typically carry 1–3% higher interest rates than new car loans, but the lower purchase price often offsets this difference.
- Trade-In Tax Benefit: In most states, sales tax is calculated on the price minus trade-in value, saving you hundreds or thousands in tax.
- Dealer vs Direct Lending: Dealerships may mark up interest rates by 1–2%. Getting pre-approved from your bank or credit union gives you leverage to negotiate.
Types of Auto Financing
- Direct Lending: You borrow directly from a bank, credit union, or online lender. You know your rate before visiting the dealer, giving you negotiating power.
- Dealership Financing: The dealer arranges financing through their lender network. Convenient but may include rate markup. Always compare with pre-approval.
- Manufacturer Financing: Special rates (0%–2.9% APR) offered by automakers through their captive finance companies. Usually requires excellent credit.
- Lease Buyout Loan: Financing the purchase of a vehicle at the end of a lease term. Rates vary — compare with purchasing a similar used car outright.
- Refinancing: Replacing your current auto loan with a new one at a lower rate. Makes sense if your credit has improved or rates have dropped since the original loan.
- Buy Here Pay Here (BHPH): In-house financing at the dealership. Typically very high rates (15–25%+) and should only be considered as a last resort.
Auto Loan Calculation Examples
Step-by-step examples showing how monthly payments and total costs are calculated
New SUV — $35,000 with Trade-In
- Vehicle price: $35,000
- Down payment: $5,000
- Trade-in value: $8,000 (no amount owed)
- Sales tax: 7% on ($35,000 − $8,000) = 7% × $27,000 = $1,890
- Fees (title, registration, doc): $600
- Tax & fees included in loan: Yes
- Loan amount: $35,000 − $5,000 − $8,000 + $1,890 + $600 = $24,490
- Rate: 5.9% APR for 60 months
- Monthly rate: 5.9% ÷ 12 = 0.4917%
- Monthly payment: $24,490 × [0.004917 × 1.004917^60] ÷ [1.004917^60 − 1] = $473.02
Monthly payment: $473.02 | Total interest: $3,891 | Total cost: $33,381
Used Sedan — $18,000 Budget Buy
- Vehicle price: $18,000
- Down payment: $3,000
- No trade-in
- Sales tax: 6% on $18,000 = $1,080
- Fees: $350
- Tax & fees included in loan: Yes
- Loan amount: $18,000 − $3,000 + $1,080 + $350 = $16,430
- Rate: 7.9% APR for 48 months (used car, good credit)
- Monthly rate: 7.9% ÷ 12 = 0.6583%
- Monthly payment: $16,430 × [0.006583 × 1.006583^48] ÷ [1.006583^48 − 1] = $399.12
Monthly payment: $399.12 | Total interest: $2,728 | Total cost: $22,158
Frequently Asked Questions
How much should I put down on a car?
Financial experts recommend putting down at least 20% on a new car and 10% on a used car. A larger down payment reduces your monthly payment, total interest paid, and the risk of being underwater on the loan (owing more than the car is worth). If you can't put 20% down, aim for at least 10% and avoid zero-down offers that lead to negative equity from day one.
What's a good interest rate for an auto loan?
As of 2025–2026, good auto loan rates are roughly: 4–6% for new cars with excellent credit (750+), 5–7% for new cars with good credit (700–749), 7–10% for used cars with good credit, and 10–15%+ for fair or poor credit. Rates vary by lender, so always get quotes from at least 3 sources — your bank, a credit union, and the dealership — before signing.
Should I choose a longer loan term for lower payments?
While longer terms (72–84 months) offer lower monthly payments, they cost significantly more in total interest. For example, a $30,000 loan at 6% costs about $3,500 in interest over 48 months but $5,800 over 72 months. Longer terms also increase the risk of being underwater. Stick to 60 months max for new cars and 36–48 months for used cars if possible.
How does a trade-in reduce my sales tax?
In most US states, sales tax is calculated on the vehicle price minus the trade-in value. For example, if you buy a $40,000 car and trade in a vehicle worth $15,000, you only pay tax on $25,000 — saving $1,050 at a 7% tax rate. However, some states (California, Hawaii, Kentucky, Maryland, Michigan, Montana, Virginia, and Washington D.C.) do not offer this tax reduction.
Is it better to finance through a dealer or my bank?
Getting pre-approved through your bank or credit union before visiting the dealer is almost always recommended. This gives you a baseline rate to compare against the dealer's offer and negotiating leverage. Dealers sometimes mark up the rate by 1–2% for profit. However, manufacturer financing promotions (0%–2.9% APR) through the dealer can beat bank rates — just compare the total cost carefully.
What fees should I expect when buying a car?
Common fees include: title and registration ($50–$500 depending on state), documentation/dealer fees ($100–$500), sales tax (0–10%+ depending on state), and possibly advertising fees or dealer-added accessories. Always ask for an itemized breakdown of all fees before signing. Some fees are negotiable (dealer fees, accessories), while others are fixed (title, registration, tax).
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 currently worth. This happens when you make a small down payment, choose a long loan term, or the car depreciates faster than you pay down the principal. New cars lose 20–30% of value in the first year. To avoid this, put at least 20% down, choose a shorter term, and avoid rolling negative equity from a previous loan into a new one.
Can I pay off my auto loan early?
Most auto loans allow early payoff without penalties, but check your loan agreement for prepayment clauses. Paying extra toward principal each month — even $50–$100 — can save hundreds or thousands in interest and shorten your loan term significantly. Focus extra payments early in the loan when the interest portion of each payment is highest.