How to Use the Auto Loan Calculator
- Enter the vehicle price, your down payment and any trade-in value.
- Enter your state and local sales tax rate and the fees you expect.
- Enter the APR from a lender or credit union pre-approval.
- Choose a loan term in months.
- Press Calculate and compare several terms.
Formula
Amount financed = price + sales tax + fees − down payment − trade-in Payment = L × r ÷ (1 − (1 + r)^−n) r = APR ÷ 12, n = months Total interest = payment × n − L
Example Calculation
A $35,000 vehicle with $5,000 down, 6% sales tax ($2,100) and $500 in fees means financing $32,600. At 7% for 60 months the payment is about $645.52 and total interest is about $6,131. Stretching to 84 months lowers the payment but raises interest considerably.
What Is an Auto Loan Calculator?
An auto loan calculator estimates the payment on a vehicle loan and reveals the interest cost. It is most useful before you walk into a dealership, when you can still set your own budget.
How the Cost Builds Up
Start with the price, add sales tax and fees, and subtract what you pay upfront. The resulting loan accrues interest each month on the remaining balance. Early payments are mostly interest, so paying extra early saves the most.
Factors That Affect Your Payment
Credit score, term, down payment and whether the vehicle is new or used all influence the rate and amount financed. A longer term can make an expensive car look affordable while hiding a higher total cost.
Tips
- Put down at least enough to cover first-year depreciation if you can.
- Negotiate the out-the-door price, not the monthly payment.
- Decline add-ons you do not need, or price them separately.
- Check that the loan has no prepayment penalty.
Common Mistakes
- Rolling negative equity from a previous car into the new loan.
- Choosing 84 months to hit a payment target.
- Ignoring insurance costs, which can differ a lot between vehicles.
If you carry other debts, see where this payment fits using the debt-to-income ratio calculator.