Auto Loan Calculator
12 Months (1 Year)
24 Months (2 Years)
36 Months (3 Years)
48 Months (4 Years)
60 Months (5 Years)
72 Months (6 Years)
84 Months (7 Years)
Estimated Monthly Payment
$0.00
Vehicle Price:
$0
Total Taxes & Fees:
$0
Down Pmt + Trade-In:
-$0
Total Loan Amount:
$0
Total Interest Paid:
$0
Total Cost of Loan:
$0
Understanding Your Auto Loan Options
Purchasing a new or used vehicle is one of the largest financial commitments most people make, second only to buying a home. Using this Auto Loan Calculator helps you estimate your monthly payments accurately by factoring in trade-in values, sales tax, and dealer fees, which are often overlooked in generic estimates.
How Is Your Car Payment Calculated?
Your monthly car payment is determined by three primary factors: the loan principal, the interest rate (APR), and the loan term. This calculator uses the standard amortization formula to determine exactly how much of your payment goes toward interest versus principal every month.
- Principal: This is the net amount you need to borrow. It is calculated as: (Vehicle Price + Sales Tax + Fees) – (Down Payment + Trade-In Value).
- Interest Rate (APR): The annual percentage rate charged by the lender. A lower credit score typically results in a higher APR, significantly increasing the total cost of the car.
- Loan Term: The duration of the loan. While a 72 or 84-month loan lowers your monthly payment, it drastically increases the total interest you pay over the life of the loan.
The Impact of Trade-Ins and Down Payments
One of the most effective ways to lower your monthly payment is to reduce the principal amount before financing. A substantial down payment (typically recommended at 20%) creates immediate equity in the vehicle. Similarly, trading in your current vehicle acts as a credit against the purchase price.
Furthermore, in many jurisdictions, you only pay sales tax on the difference between the new car price and your trade-in value. Our calculator estimates the total tax liability based on the vehicle price, though local laws regarding trade-in tax credits vary.
Short-Term vs. Long-Term Loans
It is tempting to choose a longer loan term (e.g., 84 months) to achieve a lower monthly payment. However, cars are depreciating assets. Long-term loans increase the risk of becoming "upside-down" on your loan, where you owe more than the car is worth. Financial experts generally recommend a term no longer than 60 months for new cars and 48 months for used cars to maintain financial health.