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Auto Loan Calculator

Calculate your monthly car payment and total cost

Monthly Payment

$635

Loan Amount

$32,450

Total Interest

$5,645

Monthly Payment
$635
Total Interest
$5,645

Summary

Vehicle Price$35,000
Sales Tax$2,450
Down Payment + Trade-In-$5,000
Total Interest+$5,645
Total Cost$43,095

Cost Breakdown

Loan Principal$32,450
Total Interest$5,645
Total Cost$43,095

Frequently Asked Questions

Q

What's a good auto loan interest rate in 2026?

Good auto loan rates vary by credit score: Excellent (750+) gets 5-7%, Good (700-749) gets 7-9%, Fair (650-699) gets 9-12%, Poor (<650) gets 12-18%+. Credit unions typically offer rates 1-2% lower than banks or dealer financing.

  • Credit unions: Often 1-2% lower than banks
  • Get pre-approved before visiting dealers
  • Dealer financing may beat banks for promotional 0% APR offers
  • Refinance after 6-12 months if rates improve or credit score increases
Credit ScoreNew Car RateUsed Car RateMonthly on $25K/60mo
Excellent (750+)5-7%6-8%$472-$483
Good (700-749)7-9%8-11%$483-$507
Fair (650-699)9-12%11-15%$507-$556
Poor (<650)12-18%15-20%$556-$634

Always compare at least 3 lenders: your bank, a credit union, and dealer financing. Get pre-approved before shopping to know your rate and negotiate from a position of strength. Dealers may offer special promotional rates (0% APR), but these often require excellent credit and may not be available on all vehicles.

Q

How long should my auto loan be?

Aim for 48 months or less for new cars, 36 months for used. Shorter terms mean higher payments but save thousands in interest. A $30,000 loan at 7%: 48 months costs $3,713 interest; 72 months costs $5,750 - over $2,000 more.

  • 36-48 months: Best for keeping total cost low
  • 60 months: Balance of payment and cost (most common)
  • 72-84 months: Lower payment but high risk of being underwater
  • Car depreciates faster than loan paydown on long terms
Loan TermMonthly PaymentTotal InterestTotal Paid
36 months$926$2,349$33,349
48 months$717$3,713$34,413
60 months$594$5,614$35,614
72 months$512$6,847$36,847

The danger of long auto loans: cars depreciate 15-25% in year one and 10-15% annually after. With a 72-month loan, you may owe more than the car is worth for 3-4 years ("underwater"). If you need to sell or the car is totaled, you'll owe money even after sale/insurance payout.

Q

How much down payment should I make on a car?

Aim for 20% down payment on new cars, 10% on used. On a $30,000 car, 20% down ($6,000) reduces your loan to $24,000, saving ~$1,000 in interest and keeping you from being underwater. At minimum, cover taxes, title, and fees.

  • 20% down: Ideal for new cars (avoids being underwater)
  • 10% down: Minimum for used cars
  • At least cover taxes and fees (don't finance these)
  • Trade-in value counts toward down payment
  • No money down = higher payments, more interest, underwater risk
Down PaymentLoan AmountMonthly PaymentTotal Interest
0% ($0)$30,000$594$5,614
10% ($3,000)$27,000$534$5,052
20% ($6,000)$24,000$475$4,491
Q

Should I buy new or used to save money?

Used cars (1-3 years old) offer the best value - someone else took the biggest depreciation hit. A 2-year-old car costs 20-30% less than new but still has modern features and warranty. New cars lose 20-25% value in year one.

  • New car: 20-25% depreciation in year one alone
  • 1-2 years old: 25-35% cheaper, often still under warranty
  • 3-5 years old: 40-50% cheaper, good reliability
  • Certified Pre-Owned (CPO): Extended warranty, inspected
  • New: Better financing rates, full warranty, latest features
Car AgeExample ValueDepreciationTypical Loan Rate
New ($35,000 MSRP)$35,0000%5-7%
1 year old$28,000-20%6-8%
3 years old$21,000-40%7-10%
5 years old$15,000-57%8-12%
Q

How do I calculate my monthly car payment?

Monthly payment = [Loan Amount × (r(1+r)^n)] / [(1+r)^n-1], where r = monthly rate, n = months. Example: $25,000 loan at 7% for 60 months = $495/month. Total paid = $29,702 ($4,702 interest). Use our calculator for instant results.

  • Include sales tax in loan amount (typically 6-10%)
  • Factor in registration, title, and doc fees (~$500-1,000)
  • Gap insurance: Covers difference if car is totaled while underwater
  • Don't forget insurance costs (may be higher for new/expensive cars)
Q

Is dealer financing or bank loan better?

Compare both! Dealers may offer 0% APR promotional rates (great if you qualify), but banks and credit unions often beat standard dealer rates by 1-2%. Get pre-approved from your bank first, then see if the dealer can beat it.

  • Get pre-approved from bank/credit union before shopping
  • Dealer 0% APR: Great deal, but may not negotiate on price
  • Dealers make money on financing - negotiate the rate
  • Don't reveal your pre-approved rate until after price negotiation
  • Credit union rates are typically lowest for non-promotional loans

Dealers often add 1-2% markup on their financing (called dealer reserve). They profit from this spread. If a bank approves you at 6%, the dealer might offer 8% and pocket the 2% difference. Having a pre-approval gives you leverage to negotiate or simply use your bank's rate.

Example Calculations

1$35,000 New Car with $5,000 Down at 6.5%

Inputs

Vehicle Price$35,000
Down Payment$5,000
Trade-In Value$0
Interest Rate6.5%
Loan Term60 months
Sales Tax7%

Result

Monthly Payment$635
Sales Tax Amount$2,450
Loan Amount$32,450
Total Interest$5,645

Sales tax = $35,000 × 7% = $2,450. Total price = $35,000 + $2,450 = $37,450. Loan amount = $37,450 - $5,000 - $0 = $32,450. Monthly rate = 6.5% / 12 = 0.5417%. Monthly payment = $32,450 × [0.005417 × (1.005417)^60] / [(1.005417)^60 - 1] = $635. Total interest = ($635 × 60) - $32,450 = $5,645.

2$25,000 Used Car with Down Payment and Trade-In at 5%

Inputs

Vehicle Price$25,000
Down Payment$3,000
Trade-In Value$2,000
Interest Rate5%
Loan Term48 months
Sales Tax6%

Result

Monthly Payment$495
Sales Tax Amount$1,500
Loan Amount$21,500
Total Interest$2,266

Sales tax = $25,000 × 6% = $1,500. Total price = $25,000 + $1,500 = $26,500. Loan amount = $26,500 - $3,000 - $2,000 = $21,500. Monthly rate = 5% / 12 = 0.4167%. Monthly payment = $21,500 × [0.004167 × (1.004167)^48] / [(1.004167)^48 - 1] = $495. Total interest = ($495 × 48) - $21,500 = $2,266.

Formulas Used

Loan Amount

Loan Amount = (Vehicle Price + Sales Tax) - Down Payment - Trade-In Value

Calculates the financed amount after adding tax and subtracting down payment and trade-in.

Where:

Vehicle Price= Sticker price of the vehicle
Sales Tax= Vehicle Price × (Sales Tax Rate / 100)
Down Payment= Cash paid upfront
Trade-In Value= Value of your current vehicle applied to the purchase

Monthly Payment (Amortizing Loan)

M = Loan Amount × [r(1 + r)^n] / [(1 + r)^n - 1]

Fixed monthly payment for the auto loan using the standard amortization formula.

Where:

M= Monthly payment
r= Monthly interest rate (annual rate / 100 / 12)
n= Loan term in months

Total Interest

Total Interest = (M × n) - Loan Amount

Total interest paid over the life of the auto loan.

Where:

M= Monthly payment
n= Number of monthly payments

Understanding Auto Loans

An auto loan is a secured loan where the vehicle serves as collateral. Lenders consider your credit score, income, and the vehicle's value when determining your interest rate and loan terms.

The total cost of your car includes more than the sticker price. Factor in interest charges, sales tax, registration fees, and insurance. A longer loan term means lower monthly payments but significantly more interest paid over time.

Before visiting dealerships, get pre-approved from your bank or credit union. This gives you negotiating power and a clear budget. Compare the total cost of ownership, not just the monthly payment, to make the best financial decision.

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Last Updated: Feb 12, 2026

This calculator is provided for informational and educational purposes only. Results are estimates and should not be considered professional financial, medical, legal, or other advice. Always consult a qualified professional before making important decisions. UseCalcPro is not responsible for any actions taken based on calculator results.

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