Auto Loan Calculator
Estimate your monthly car payment including trade-in value, sales tax, and total loan interest.
How to use this auto loan calculator
- Enter the negotiated vehicle price — always negotiate the price before discussing financing.
- Enter down payment and trade-in value separately.
- Enter your state's sales tax rate — it applies to price minus trade-in in most states.
- Enter the APR your lender or dealer quoted.
- Compare 48-month and 60-month terms — the interest difference is often substantial.
Formula
Loan = price + sales tax − down payment − trade-in. Monthly payment = standard amortization formula.
About the Auto Loan Calculator
The auto loan calculator reveals a truth many car buyers avoid: the monthly payment is not the cost of the car. It is the cost of the car plus interest, spread into small enough pieces to feel manageable. Focusing on monthly payment rather than total cost is exactly how dealers extract thousands of extra dollars from buyers. The dealer finance office exists for one purpose: to capture financing profit. Even after negotiating a good vehicle price, a dealer finance manager can recover margin through rate markup (getting you a higher rate than you qualify for and keeping the difference), extended warranties, gap insurance, and payment protection products. The most powerful protection is arriving with a pre-approval from your bank or credit union in hand. Vehicle depreciation interacts with auto loans in important ways. A new car loses approximately 20–30% of its value in the first year and 50% in five years. If you take a 60-month loan with a small down payment, you will almost certainly be underwater (owe more than the car is worth) for the first two to three years. Gap insurance covers this difference if the car is totaled, which is worth considering for new car purchases with less than 20% down. The most financially efficient transportation strategy for most people is buying a reliable 3–5 year old used vehicle with cash or a short loan. A 3-year-old vehicle has absorbed the steepest depreciation while typically retaining years of reliable service. At this point, the original buyer took the largest financial hit and you get the remaining value at a much lower price.
Frequently asked questions
+What is a good interest rate for a car loan in 2024?
As of 2024, average auto loan rates are approximately 6.8% for new cars and 11.8% for used cars with good credit. Excellent credit (750+) can achieve rates of 5–7% for new vehicles from credit unions. Poor credit (below 580) may face rates of 15–25%+. Credit unions consistently offer rates 1–3% lower than dealership financing for members with good credit. Always get pre-approved from your bank or credit union before visiting a dealership — this gives you leverage and a rate benchmark.
+Should I take the 0% dealer financing or the cash rebate?
This depends on the rebate amount and what you would do with the cash. If a dealer offers 0% for 48 months or a $3,000 cash rebate on a $35,000 car, calculate the interest cost at a market rate for the same term. At 7% for 48 months on $35,000, total interest is approximately $5,190. Taking the $3,000 rebate saves the full $3,000 upfront, but you pay $5,190 in interest — net cost $2,190 more than 0% financing. Most of the time, 0% financing is worth more than the cash rebate for buyers who would finance anyway. If you are paying cash, take the rebate.
+Why should I avoid 72 or 84-month car loans?
Long loan terms (6–7 years) keep monthly payments artificially low while costing substantially more in total interest and creating 'underwater' risk. On a $32,000 car at 7.5%: a 60-month loan costs $3,180 in interest total; an 84-month loan costs $9,086 — nearly $6,000 more. Additionally, cars depreciate approximately 15–20% per year in the early years. With an 84-month loan, you may owe more than the car is worth for 3–5 years, leaving you trapped if you need to sell or if the car is totaled.
+How much should I spend on a car?
Financial planners commonly suggest keeping total vehicle expenses (payment, insurance, gas, maintenance) below 15–20% of gross monthly income, and keeping the car loan payment specifically below 10% of gross income. At $60,000 annual salary ($5,000/month gross), a car payment up to $500/month is the rough guideline. However, many people do better financially by keeping car costs much lower — a reliable used car purchased with cash or a short-term loan eliminates both interest and depreciation risk. The wealthiest Americans are statistically more likely to drive paid-off older vehicles than new luxury cars.