Auto Loan Calculator — Know Your Car Payments Before You Buy
Planning to buy a new or used car? Our Auto Loan Calculator helps you estimate your monthly payment, total loan cost, and interest breakdown in seconds. Understand your options and make smart, confident decisions before heading to the dealership.
1. What Is an Auto Loan?
An auto loan is a secured loan that helps you buy a vehicle by borrowing money from a bank, dealership, or lender. You agree to repay the loan in monthly installments over a set period, with interest. The vehicle itself serves as collateral, meaning the lender can repossess it if payments aren’t made.
2. Key Inputs of This Calculator
- Vehicle Price: Total cost of the car you plan to buy (before taxes or fees).
- Down Payment: The amount you pay upfront — a higher down payment reduces your monthly payment and total interest.
- Loan Term: Length of the loan, usually 36 to 72 months. Shorter terms save you money on interest.
- Interest Rate: The annual cost of borrowing, often based on your credit score and the lender's offer.
Example: For a $30,000 car with a 10% down payment ($3,000), 6% interest, and 5-year term: Your loan amount is $27,000. Monthly payment ≈ $521. Total interest paid over 5 years ≈ $4,260.
3. What Is Amortization?
Amortization is how your loan gets paid off over time. In the early months, more of your payment goes toward interest. Over time, a larger portion reduces your loan balance (the principal).
Our calculator shows this breakdown in both a chart and an amortization table, so you can see how each payment affects your balance.
4. Factors That Affect Your Auto Loan
- Credit Score: Higher scores often qualify for lower interest rates.
- Down Payment: A bigger down payment reduces the loan amount and risk for the lender.
- Loan Term: Shorter terms mean higher monthly payments, but less interest overall.
- New vs Used Car: New car loans usually have lower rates but higher amounts; used cars often come with slightly higher rates.
5. Additional Costs to Budget For
- 📄 Taxes & Registration: Varies by state. Sales tax alone can be 5%–10% of the car price.
- 🛡 Insurance: Full coverage can range from $1,200–$2,000+ annually depending on age, driving history, and location.
- 💳 Dealer Fees: May include documentation fees, delivery fees, and more.
- 🛠 Maintenance: Especially important for used cars — budget 1%–2% of vehicle value per year.
6. Tips to Save on Your Auto Loan
- ✔️ Shop around for the best loan rates before going to the dealership.
- ✔️ Make a larger down payment if possible to reduce interest.
- ✔️ Keep the term under 60 months for long-term savings.
- ✔️ Consider pre-approval — it strengthens your negotiating power.
- ✔️ Avoid add-ons (like extended warranties) unless you truly need them.
7. Should You Finance or Lease?
Leasing can offer lower monthly payments and lets you drive a new car every few years — but you don’t own the vehicle. Financing allows you to build equity and keep the car as long as you want. If you drive a lot or prefer long-term ownership, buying is often the better financial move.
8. Plan Before You Buy
Use this calculator to test different prices, terms, and rates. Know your budget before you walk into a dealership. Don’t just think about whether you can afford the monthly payment — think about the total loan cost and your long-term goals.