Auto Loan Calculator
Calculate your monthly car payment with trade-in value, down payment, sales tax, and fees. Includes full amortization schedule, depreciation warning, and affordability check — know the true cost before you sign.
🚗 Auto Loan Calculator
🚗 Vehicle Details
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💳 Loan Terms
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🧾 Taxes & Fees (optional)
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Monthly Payment
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Loan Amount
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Total Interest
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Total Out-of-Pocket
Principal Borrowed—
Total Interest—
Taxes & Fees—
Payoff Date—
Affordability Check
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0%—20% max
Effective APR & Loan Details
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—Monthly Payment
—Loan Amount
—Total Paid
—Payoff Date
📉 Depreciation Warning — Your Car's Value Over Time
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| Month | Payment | Principal | Interest | Balance |
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Option A
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Total interest: —
Total cost: —
Option B
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/month
Total interest: —
Total cost: —
Maximum Car Price You Can Afford
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—Max Loan Amount
—Total Interest
—Total Cost
📋 Table of contents
How to use the auto loan calculator
This calculator has three modes:
- Car Payment — enter vehicle price, down payment, trade-in, APR, and loan term to see your monthly payment, total interest, amortization schedule, and depreciation warning.
- Loan by Budget — enter your monthly budget and get the maximum car price you can afford.
- Compare Loans — compare two loan scenarios (different APRs, terms, or down payments) side by side to find the better deal.
Pro tip: Before visiting a dealership, run the numbers yourself. Dealers often negotiate around monthly payment rather than total cost — a longer term makes an expensive car appear affordable while quietly adding thousands in interest.
How monthly car payments are calculated
Auto loans use the standard amortization formula where each payment is equal but the split between principal and interest shifts over time:
Monthly Payment = L × [r(1+r)ⁿ] / [(1+r)ⁿ − 1]
Where:
L = Loan amount (price − down payment − trade-in + tax + fees)
r = Monthly interest rate = APR ÷ 12 ÷ 100
n = Loan term in months
Example: $25,000 loan · 7% APR · 60 months
r = 7 ÷ 12 ÷ 100 = 0.005833
n = 60
Payment = 25000 × [0.005833 × 1.005833⁶⁰] / [1.005833⁶⁰ − 1]
Payment = $495.03/month
Total paid = $29,701.80 · Total interest = $4,701.80
Current auto loan APR rates by credit score (2026)
Your credit score is the biggest factor in what APR you'll be offered. The average APR on a new-car loan with a 60-month term was 7.22% in the fourth quarter of 2025, according to the Federal Reserve.
| Credit Score | Credit Tier | New Car APR (avg) | Used Car APR (avg) | Monthly on $25K/60mo |
|---|---|---|---|---|
| 750+ | Excellent | 4.5% – 6% | 5.5% – 7% | $464 – $483 |
| 700–749 | Good | 6% – 8% | 7% – 9.5% | $483 – $507 |
| 650–699 | Fair | 8% – 11% | 9.5% – 13% | $507 – $543 |
| 600–649 | Poor | 11% – 14% | 13% – 17% | $543 – $582 |
| Below 600 | Subprime | 14% – 20%+ | 17% – 25%+ | $582 – $672+ |
Save thousands: Improving your credit score from "Fair" to "Good" before applying for a car loan can save $2,000–$4,000+ in total interest on a typical $25,000 auto loan. Even a 3-month delay to improve your score can be worth it.
How trade-in value works
When you trade in your current vehicle at a dealership, its value is applied as a credit toward your new car purchase. This reduces the amount you need to finance.
- Trade-in value — what the dealer offers for your current car (typically 10–20% below private sale value).
- Amount owed — if you still have a loan on your current car, that balance must be paid off. If trade-in value > owed amount, the difference reduces your new loan. If owed > trade-in, the difference (negative equity) is added to your new loan.
- Sales tax reduction — in most states, trade-in value is subtracted from the purchase price before sales tax is calculated, saving you additional money.
Get multiple quotes: Dealerships typically offer 10–20% less than private sale value for trade-ins. Check KBB (Kelley Blue Book), Edmunds, or CarMax for real market value before negotiating.
The 20/4/10 car buying rule
This rule of thumb helps ensure your car purchase doesn't strain your finances:
- 20% — Put at least 20% down (10% minimum for used cars). This reduces negative equity risk and lowers your payment and total interest.
- 4 years — Finance for no longer than 48 months. Longer terms mean more total interest and increased risk of being "underwater" (owing more than the car is worth).
- 10% — Total monthly car expenses (payment + insurance + gas + maintenance) should not exceed 10% of your gross monthly income.
Reality check for 2026: With average new car prices now exceeding $48,000, strictly following the 20/4/10 rule requires an income of $10,000+/month. For most buyers, a modified version — 10% down, 60 months max, 15% of income — is more realistic, but the principle of avoiding over-leveraging on a depreciating asset still stands.
Loan term comparison: 36 vs 48 vs 60 vs 72 months
A longer loan term reduces monthly payments but significantly increases total interest. Here's the real cost breakdown for a $30,000 loan at 7% APR:
| Term | Monthly Payment | Total Interest | Total Cost | Extra vs 36 mo |
|---|---|---|---|---|
| 36 months | $927 | $3,372 | $33,372 | — |
| 48 months | $718 | $4,464 | $34,464 | +$1,092 |
| 60 months | $594 | $5,640 | $35,640 | +$2,268 |
| 72 months | $513 | $6,936 | $36,936 | +$3,564 |
| 84 months | $452 | $7,968 | $37,968 | +$4,596 |
Going from 36 to 84 months saves only $475/month but costs an additional $4,596 over the life of the loan — plus extra years of depreciation risk.
Car depreciation and negative equity
Cars depreciate (lose value) rapidly — this is why the calculator includes a depreciation warning showing your loan balance vs estimated car value year by year.
- New cars lose approximately 10–20% of value the moment they're driven off the lot.
- Year 1: 15–25% depreciation from purchase price
- Year 3: 40–55% of original value lost
- Year 5: 55–65% of original value lost
Negative equity (being "underwater"): If your car's value drops faster than you pay down your loan, you owe more than the car is worth. This is especially risky with long-term loans and small down payments. If you need to sell or trade in before the loan is paid off, you'll have to cover the difference out of pocket.
Frequently Asked Questions
Monthly payment = Loan Amount × [r(1+r)^n] ÷ [(1+r)^n − 1], where r is the monthly interest rate (APR÷12÷100) and n is the number of months. For a $25,000 loan at 7% APR over 60 months: r = 0.005833, monthly payment = $495.03. This calculator does this automatically with trade-in, tax, and fees included.
As of 2025–2026, APRs below 6% are considered excellent for new cars (requires 720+ credit score). The national average for new car loans is around 7–8%. Anything above 10% is high, and above 15% is subprime. Used car rates are typically 1–2% higher than new car rates for the same credit score.
Financial advisors recommend 20% down on a new car and 10% on a used car. A larger down payment reduces your loan amount, monthly payment, and total interest paid. It also reduces the risk of being underwater (owing more than the car is worth) due to depreciation. If 20% isn't possible, at minimum cover the sales tax and fees to avoid financing them.
Put at least 20% down, finance for no longer than 4 years (48 months), and keep total car expenses under 10% of gross monthly income. This helps prevent car ownership from straining your budget. Use our Affordability Check in the calculator to see if your planned purchase fits these guidelines.
It depends on the rebate amount, the interest rate difference, and loan term. Generally, if the rebate is large (e.g., $3,000+) and the dealer's special rate is only slightly lower than what you'd qualify for elsewhere, take the cash rebate and finance at your own rate. Use the Compare Loans tab in this calculator to model both scenarios with exact numbers.
Usually yes, and it saves all the interest that would have accrued on the remaining balance. However, check your loan agreement for prepayment penalties — some lenders charge a fee (typically 2–3% of remaining balance) for paying off early. If there's no prepayment penalty, early payoff is almost always the right financial move.