Finance

Auto Loan Calculator

Calculate your monthly car payment, compare financing options, and see the true cost of vehicle ownership.

Quick Answer

Auto loan payments use the same amortization formula as mortgages: M = P[r(1+r)^n] / [(1+r)^n - 1]. A $35,000 car loan at 6.5% APR for 60 months costs approximately $685/month, with $6,100 in total interest paid. A larger down payment or shorter loan term (36 vs. 72 months) significantly reduces total interest, though monthly payments will be higher.

$
$
$
0%20%
%
Monthly Payment
$634.92
Amount Financed
$32,450
Total Interest
$5,645
Total Cost
$38,095

Loan Details

Vehicle Price
$35,000
Sales Tax (7%)
+$2,450
Down Payment
-$5,000
Amount Financed
$32,450
Interest Rate / Term
6.5% APR / 60 months
Total Interest Paid
$5,645
Total of All Payments
$38,095

Total Cost of Ownership (Monthly)

Adjust estimates to match your situation.

$
$
$
Loan Payment
$634.92
Insurance
$150
Maintenance
$100
Fuel
$150
True Monthly Cost
$1,034.92
Disclaimer: This calculator provides estimates for informational purposes only. Actual loan terms, interest rates, and costs depend on your credit score, lender, and local tax rates. Sales tax calculations are simplified and may not reflect your specific state and local rates. Total cost of ownership figures are estimates. This tool does not constitute financial advice. Always consult with your lender or a qualified financial advisor before making vehicle financing decisions.
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About This Tool

The Auto Loan Calculator helps you understand the true cost of financing a vehicle. Whether you're buying new or used, this tool calculates your monthly payment, total interest, and the full cost of ownership including insurance, fuel, and maintenance.

Car buying is one of the biggest financial decisions you'll make. A car is a depreciating asset, which means the total cost matters far more than the monthly payment. This calculator helps you see the full picture so you can make an informed decision that fits your budget.

Understanding Auto Loan Terms

Auto loans typically range from 24 to 84 months. While longer terms lower your monthly payment, they cost significantly more in total interest and put you at risk of negative equity, which is when you owe more than the car is worth. Financial experts generally recommend keeping auto loans to 60 months or less.

The Impact of Your Down Payment

A larger down payment reduces the amount you finance, which means lower monthly payments and less total interest. Aim for at least 20% down to avoid being underwater on your loan. Your trade-in value also reduces the amount financed and in most states reduces the taxable purchase price.

Beyond the Monthly Payment

The sticker price and monthly payment are just the beginning. Budget for insurance, fuel, maintenance, registration, and depreciation. The total cost of ownership section above gives you a realistic monthly figure so there are no surprises after you drive off the lot.

Shopping for the best financing terms? Read our complete guide: Auto Loan: How to Get the Best Deal.

Frequently Asked Questions

How is a car loan monthly payment calculated?
The monthly payment uses the standard amortization formula: M = P[r(1+r)^n] / [(1+r)^n - 1], where P is the amount financed, r is the monthly interest rate, and n is the number of payments. The amount financed includes the vehicle price plus sales tax, minus your down payment and trade-in value.
Should I choose a longer or shorter loan term?
Shorter terms (24-48 months) have higher monthly payments but lower total interest. Longer terms (60-84 months) offer lower monthly payments but cost significantly more in total interest. A 60-month loan is the most common balance of affordability and total cost. Avoid 84-month loans if possible, as you may owe more than the car is worth (negative equity).
How does a trade-in reduce my loan?
Your trade-in value is subtracted from the vehicle price before calculating the amount financed. In most states, you also save on sales tax because tax is only charged on the difference between the new car price and your trade-in value. For example, trading in a $10,000 car on a $35,000 purchase means you only pay tax on $25,000.
What is the true monthly cost of owning a car?
The total cost of ownership goes beyond your loan payment. You should budget for insurance ($100-$250/month), fuel ($100-$300/month), maintenance ($50-$150/month), registration, and depreciation. The true monthly cost of car ownership typically ranges from $700-$1,200 for a new vehicle.
How much car can I afford?
A common guideline is to spend no more than 10-15% of your monthly take-home pay on a car payment. Use the 'How Much Can I Afford?' mode to reverse-calculate the maximum vehicle price based on your monthly budget. Also consider total ownership costs including insurance, fuel, and maintenance.

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