This is an estimate. Actual payments may vary based on lender terms and credit approval.
Understanding Your Car Affordability
Purchasing a vehicle is a significant financial decision. While the sticker price is important, understanding the monthly payment is crucial for budgeting. This calculator helps you estimate your potential monthly car payment based on the vehicle's price, your down payment, the loan term, and the annual interest rate.
How the Calculator Works
The calculator uses a standard loan amortization formula to determine the monthly payment. The core components are:
Principal Loan Amount: This is the total cost of the car minus your down payment.
Annual Interest Rate: The yearly percentage charged by the lender. This is converted to a monthly rate for the calculation.
Loan Term: The total number of months you have to repay the loan.
The Formula
The formula for calculating the monthly payment (M) is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
P = Principal Loan Amount (Vehicle Price – Down Payment)
n = Total Number of Payments (Loan Term in Months)
Example Calculation
Let's say you're looking at a car priced at $25,000. You plan to make a $5,000 down payment. You want a loan term of 60 months, and you've secured an estimated annual interest rate of 5.5%.
This calculation would result in an estimated monthly payment of approximately $377.89.
Tips for Using the Calculator
Experiment with Terms: See how extending or shortening the loan term impacts your monthly payment and the total interest paid over time.
Factor in Other Costs: Remember that this calculator only estimates the loan payment. You'll also need to budget for insurance, fuel, maintenance, registration, and taxes.
Get Pre-Approved: Understanding your estimated payment can help you set a realistic budget before you visit the dealership.
Use Realistic Rates: Interest rates vary based on credit score, lender, and market conditions. Use the rate you realistically expect to qualify for.
function calculateMonthlyPayment() {
var vehiclePrice = parseFloat(document.getElementById("vehiclePrice").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var loanTermMonths = parseInt(document.getElementById("loanTermMonths").value);
var interestRateAnnual = parseFloat(document.getElementById("interestRateAnnual").value);
var resultContainer = document.getElementById("resultContainer");
var monthlyPaymentResult = document.getElementById("monthlyPaymentResult");
// Clear previous results and styles
monthlyPaymentResult.textContent = "–";
resultContainer.style.display = 'none';
// Input validation
if (isNaN(vehiclePrice) || vehiclePrice <= 0) {
alert("Please enter a valid Vehicle Price.");
return;
}
if (isNaN(downPayment) || downPayment < 0) {
alert("Please enter a valid Down Payment amount.");
return;
}
if (isNaN(loanTermMonths) || loanTermMonths <= 0) {
alert("Please enter a valid Loan Term in months.");
return;
}
if (isNaN(interestRateAnnual) || interestRateAnnual vehiclePrice) {
alert("Down Payment cannot be greater than the Vehicle Price.");
return;
}
var principal = vehiclePrice – downPayment;
var monthlyInterestRate = (interestRateAnnual / 100) / 12;
var numberOfPayments = loanTermMonths;
var monthlyPayment = 0;
if (monthlyInterestRate === 0) {
// Handle 0% interest rate case
monthlyPayment = principal / numberOfPayments;
} else {
// Standard loan amortization formula
monthlyPayment = principal * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
}
// Format the result to two decimal places
monthlyPaymentResult.textContent = "$" + monthlyPayment.toFixed(2);
resultContainer.style.display = 'block';
}