Auto Loan Calculator

Enter the vehicle price, down payment, trade-in value, interest rate, and loan term to calculate the monthly payment, total payment, and total interest for your car loan.

Tips

  • A larger down payment and trade-in value shrink the loan principal, lowering both the monthly payment and the total interest you pay.
  • Auto loan rates run higher than mortgage rates — dealer financing typically sits around 3-8% APR, while bank auto loans often run 1.5-4% APR.
  • Stretching out the term lowers the monthly payment, but raises the risk of owing more than the car is worth as it depreciates faster than you pay it off.
  • New-car balloon (residual value) loans can lower monthly payments further, but usually come with mileage limits you need to watch closely.
  • Comparing rates across a few lenders and dealers before signing can shave hundreds or even thousands off the total amount you repay.

Frequently Asked Questions

Cars lose value every mile they are driven, which makes them a less stable form of collateral than real estate. That extra risk is why dealer-arranged auto financing often runs 3-8% APR, compared with roughly 0.3-1.0% for a variable-rate mortgage.

Putting down around 10-20% of the vehicle price reduces both your loan principal and total interest, and helps you avoid owing more than the car is worth as it depreciates. Just make sure you keep enough cash on hand for emergencies rather than draining your savings entirely.

Dealer financing is fast and convenient — you can often drive away the same day — but typically carries a higher rate, around 3-8% APR. Bank auto loans take longer to approve but often come in lower, around 1.5-4% APR, so it is worth getting pre-approved if you are not in a hurry.

Dealers assess the model year, mileage, condition, and current market demand for your vehicle. Trading in is convenient since it happens alongside your new purchase, but the appraisal tends to run lower than what a dedicated used-car buyer would offer, so comparing a few quotes can pay off.

Most buyers choose somewhere between 3 and 7 years. A shorter term means higher monthly payments but less total interest, while stretching the term out lowers the monthly cost at the expense of paying more interest overall.
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Side Note — How auto loans differ from mortgages

Auto loans and mortgages both use the same amortized-payment formula, but the two products behave very differently in practice. A mortgage is backed by land and a building whose value tends to hold up for decades, so lenders are comfortable stretching repayment out to 15-35 years. A car, on the other hand, starts losing value the moment it leaves the lot, so auto loan terms are usually kept to a much tighter 3-7 years.

Interest rates reflect that difference in risk. Mortgage rates on a variable loan often sit around 0.3-1.0% in low-rate markets, while dealer-arranged auto financing commonly runs 3-8% APR. Because a car depreciates quickly, lenders price in more risk than they would for a home loan. Bank-arranged auto loans usually take longer to approve than dealer financing, but often come with meaningfully lower rates — worth comparing if you are not in a rush to drive off the lot.

Trade-in value is a factor unique to auto loans. Selling your current car back to the dealer and applying the appraised value toward the down payment effectively shrinks how much you need to borrow. That said, dealer trade-in offers tend to run lower than what a dedicated used-car buyer would pay, so getting a couple of independent appraisals before you trade in can meaningfully reduce your total cost.

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