Car Loan Calculator
Calculate your auto loan payment, total cost, and see how trade-ins and down payments affect your financing.
Auto Loan Formulas
Monthly Payment
Total Interest
Loan Amount
Common Terms
Understanding Car Loans
A car is often the second-largest purchase people make, so understanding your financing options is essential. Our car loan calculator helps you see the true cost of vehicle ownership, including interest, taxes, and the impact of trade-ins.
Whether you're buying new or used, financing through a dealer or bank, this calculator helps you make an informed decision and negotiate with confidence.
Full Cost View
See the true cost including interest and taxes.
Trade-In Value
Factor in your current vehicle's value.
Compare Terms
See how loan length affects your payment.
Down Payment Impact
Understand how more down saves money.
New vs Used Car Financing
Interest rates and loan terms often differ significantly between new and used car loans.
| Factor | New Car Loan | Used Car Loan | Difference |
|---|---|---|---|
| Typical APR | 4-7% | 6-10% | New cars get better rates |
| Loan terms | Up to 84 months | Up to 72 months | New has more options |
| Down payment | 0-20% | 10-20% | Used often requires more |
| Depreciation | 15-20% year 1 | Already depreciated | Used = less value loss |
| Total cost | Higher | Lower | Used saves money overall |
How to Get the Best Car Loan
A little preparation before visiting the dealership can save you thousands of dollars.
Get Pre-Approved First
Get a loan offer from your bank or credit union before visiting dealers. This gives you negotiating power and a baseline to compare dealer financing against.
Focus on Total Price
Dealers love to negotiate based on monthly payment, which hides the total cost. Always negotiate the vehicle price first, then discuss financing. A lower monthly payment with a longer term often costs much more overall.
Choose the Shortest Term You Can Afford
While 72-84 month loans have lower payments, you'll pay thousands more in interest. A 48-60 month term is typically the sweet spot between affordable payments and reasonable total cost.
Put 20% Down
A 20% down payment reduces your loan amount, gets you better rates, and helps avoid being 'underwater' (owing more than the car is worth). This is especially important for new cars that depreciate quickly.
Check Your Credit First
Know your credit score before shopping. Excellent credit (750+) qualifies for the best rates. If your score is below 700, consider improving it before buying or expect higher rates.
Compare Multiple Lenders
Don't just accept dealer financing. Compare offers from banks, credit unions, and online lenders. Credit unions often have the best rates for auto loans.
Understanding Trade-Ins
A trade-in can simplify your car purchase, but understanding its value is crucial.
Know Your Car's Value
Check Kelley Blue Book, Edmunds, and NADA Guides before visiting dealers. Know both the trade-in value (wholesale) and private sale value. Dealers typically offer closer to wholesale.
Clean and Repair First
A clean car with minor repairs made can increase your trade-in offer by hundreds of dollars. Fix small dents, replace worn tires, and detail the interior.
Negotiate Separately
Negotiate the new car price first, then the trade-in value separately. Don't let dealers combine these negotiations—it makes it easier to hide unfavorable terms.
Underwater Trade-Ins
If you owe more than your car is worth, that difference gets added to your new loan. This 'negative equity' makes your new car even more expensive. Consider paying down your current loan first.
The Hidden Costs of Long Loan Terms
Extended loan terms seem attractive because of lower payments, but they come with significant downsides.
More Interest Paid
A $30,000 car at 6% for 60 months costs $4,800 in interest. The same loan for 84 months costs $6,850 in interest—$2,050 more, even with a lower monthly payment.
Negative Equity Risk
Cars depreciate faster than long loans pay down. With a 72-84 month loan, you could be underwater for 3-4 years, making it expensive to sell or trade in.
Maintenance Overlap
Long loans mean you might still be making payments when major maintenance is needed. An 84-month loan on a new car means you're still paying when the warranty expires and repairs become your responsibility.
Higher Insurance Required
As long as you have a loan, you must carry comprehensive and collision insurance. With a long loan, you're paying full coverage on a car that's lost significant value.
Frequently Asked Questions
What's a good interest rate for a car loan?
As of 2024, good rates for new cars are 4-6% with excellent credit (750+), 6-8% with good credit (700-749), and 8-12% with fair credit (650-699). Used car rates are typically 1-2% higher. Rates vary by lender and market conditions.
Should I finance through the dealer or my bank?
Get pre-approved from your bank or credit union first, then compare with dealer offers. Dealers sometimes offer promotional rates (like 0% APR) on new cars that beat bank rates. However, these often require forgoing cash rebates—do the math on both options.
How much should I put down on a car?
Ideally 20% for a new car, 10% minimum for used. A larger down payment reduces your loan amount, gets better rates, and helps avoid being underwater. If you can't put 20% down, consider a less expensive vehicle.
Is it better to lease or buy?
Buying is usually better financially if you keep cars long-term (7+ years). Leasing can make sense if you want a new car every 2-3 years, drive fewer miles than average, and value lower maintenance. Calculate total cost for your situation.
Can I negotiate the interest rate?
Yes! Dealers often mark up lender rates for profit. If you have pre-approval from a bank, you can use it to negotiate. Also, ask about rate discounts for autopay enrollment or having a checking account with the lender.
What's the ideal loan term for a car?
48-60 months is the sweet spot for most buyers. This balances affordable payments with reasonable total cost. Avoid 72-84 month loans unless absolutely necessary—you'll pay significantly more interest and risk being underwater.
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