Car Loan
Auto financing cost estimator
The Car Loan Calculator estimates the monthly payment, total interest, and total amount paid on a fixed-rate auto loan. Enter the financed amount (vehicle price minus down payment and trade-in), the annual percentage rate (APR), and the loan term in months.
This is the same fully-amortizing formula used for mortgages, scaled to a shorter term. Most car loans run between 36 and 72 months, though 84-month terms are increasingly common.
What it calculates
- Monthly payment (principal + interest).
- Total interest paid over the full term.
- Total amount you will pay across all monthly payments.
It does not include sales tax, registration fees, title fees, dealer documentation fees, or extended warranty add-ons. Subtract those from the financed amount before entering the loan figure, or model them separately.
The formula
Same fully-amortizing formula as a mortgage:
M = P × r × (1 + r)^n / ((1 + r)^n − 1)
Where P is the amount financed, r is the monthly interest rate (APR ÷ 12 ÷ 100), and n is the number of monthly payments.
Worked example
A $35,000 vehicle, 10% down ($3,500), $31,500 financed at 7.5% APR for 60 months:
- Monthly payment ≈ $631
- Total paid over 60 months ≈ $37,872
- Total interest ≈ $6,372
Extending the term to 72 months drops the monthly payment by roughly $100 but adds more than $1,600 in total interest.
When to use this
Use it before walking into a dealership so you have an independent expectation of what a payment should look like. If the dealer quotes a payment that does not match this calculator with the same inputs, ask them to itemise the difference — it is usually fees or add-ons rolled into the loan.
Caveats
Dealer financing can come with rebates and promotional APRs that interact in non-obvious ways. Manufacturer 0% offers are often mutually exclusive with cash rebates, so the lower-APR option is not always the cheaper total cost. Always compare total amount paid, not just the monthly payment.
Frequently asked questions
Should I take the longer term to get a lower payment?
Lower monthly payments feel easier but typically cost more in total interest, and you are more likely to be "underwater" (owing more than the car is worth) longer. Shortest term you can comfortably afford is generally the better choice.
Does this include sales tax?
No. Many lenders let you finance sales tax with the loan; in that case, include it in the financed amount. If you pay tax in cash up front, do not include it.
What APR should I expect?
It varies significantly with credit score, term, and whether the vehicle is new or used. Check your bank or credit union pre-approval first so you have a benchmark before negotiating.