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Car Payment Calculator

Calculate your monthly car payment

Monthly Payment

$478

Loan Amount

$25,000

Total Interest

$3,652

Total Cost

$28,652

$
$
$
%
Monthly Payment

$478

Loan Amount

$25,000

Total Interest

$3,652

Total Cost

$28,652

Payment Breakdown

Loan Principal$25,000
Total Interest$3,652
Total Payment$28,652

Frequently Asked Questions

Q

How much will my car payment be?

Estimate: For every $1,000 financed at 7% for 60 months, pay ~$20/month. A $25,000 loan = ~$500/month. Actual payment depends on rate, term, and down payment. Use our calculator for exact numbers.

  • Quick estimate: ~$20/month per $1,000 at 7% for 60 months
  • Higher rate = higher payment
  • Longer term = lower payment but more interest
  • Include sales tax in loan amount (6-10% of price)
Loan Amount (5 years, 7%)Monthly PaymentTotal InterestTotal Cost
$20,000$396$3,761$23,761
$25,000$495$4,702$29,702
$30,000$594$5,642$35,642
$35,000$693$6,583$41,583
Q

How much car can I afford?

Rule: Total car costs (payment + insurance + gas) should be under 15-20% of take-home pay. On $4,000/month take-home, budget $600-800/month total. That's roughly $350-500 payment, leaving room for insurance and gas.

  • 15% rule: Car payment ≤ 15% of take-home pay
  • 20/4/10 rule: 20% down, 4-year loan, 10% of income
  • Include: Payment, insurance, gas, maintenance
  • Don't forget: Registration, parking, toll costs
  • Total ownership cost matters, not just payment
Monthly Take-HomeMax Car Payment (15%)Max Total Car Costs (20%)
$3,000$450$600
$4,000$600$800
$5,000$750$1,000
$6,000$900$1,200
Q

Should I buy or lease a car?

Buy: Lower total cost if keeping 5+ years. Lease: Lower monthly payment, new car every 2-3 years. Leasing costs more long-term but fits people who want low payments and new cars. High-mileage drivers should buy.

  • Buying: Best value if keeping car 5+ years
  • Leasing: Works if you value new features and low payment
  • Lease: Over-mileage fees $0.15-0.30/mile over limit
  • Buy used: Best financial decision for most people
FactorBuy (Finance)Lease
Monthly paymentHigherLower (20-30% less)
OwnershipYou own itReturn at end
Long-term costLowerHigher (pay forever)
Mileage limitsNone10-15K/year
Best ifKeep 5+ yearsWant new car every 2-3 years
Q

What is a good interest rate for a car loan?

Good rate depends on credit: Excellent (750+): 5-7%. Good (700-749): 7-9%. Fair (650-699): 9-12%. Poor (<650): 12-18%+. New cars get better rates than used. Credit unions often beat banks and dealers.

  • Get pre-approved before shopping
  • Credit unions: Often 1-2% lower rates
  • Dealer 0% APR: Great if available, requires excellent credit
  • Refinance after 6-12 months if credit improves
Credit ScoreNew Car RateUsed Car Rate$25K Loan Difference
Excellent (750+)5-7%6-8%-
Good (700-749)7-9%8-10%+$1,000 in interest
Fair (650-699)9-12%10-14%+$2,500 in interest
Poor (<650)12-18%15-20%+$5,000+ in interest
Q

How long should my car loan be?

Recommended: 48 months (new), 36 months (used). Maximum: 60 months. Avoid 72-84 month loans - you'll be underwater for years and pay thousands more in interest. Higher payment on shorter term saves money.

  • 48 months: Sweet spot for new cars
  • 36 months: Best for used cars (match expected life)
  • 60+ months: Car depreciates faster than you pay it off
  • Underwater: Owe more than car is worth (common with long loans)
$25,000 Loan at 7%36 Months48 Months60 Months72 Months
Monthly Payment$772$599$495$426
Total Interest$2,782$3,713$4,702$5,747
Extra Cost vs 36mo-+$931+$1,920+$2,965
Q

How much down payment should I put on a car?

20% down on new cars, 10% on used cars. At minimum, cover taxes and fees so you don't finance them. Down payment reduces monthly payment, total interest, and prevents being underwater on the loan.

  • 20% down: Ideal, avoids being underwater immediately
  • 10% down: Minimum for reasonable loan terms
  • 0% down: Higher payment, more interest, underwater risk
  • Trade-in counts as down payment
  • Don't drain emergency fund for down payment
$30,000 Car, 7%, 60 moMonthly PaymentTotal InterestEquity at 1 Year
0% down ($30,000 loan)$594$5,642-$4,000 (underwater)
10% down ($27,000 loan)$534$5,078-$1,500
20% down ($24,000 loan)$475$4,513+$1,000

Example Calculations

1$30,000 Car with $5,000 Down at 5.5% for 60 Months

Inputs

Car Price$30,000
Down Payment$5,000
Trade-In Value$0
Interest Rate5.5%
Loan Term60 months

Result

Monthly Payment$478
Loan Amount$25,000
Total Interest$3,653
Total Cost$28,653

Principal = $30,000 - $5,000 = $25,000. Monthly rate = 5.5% / 12 = 0.4583%. Payment = $25,000 x [0.004583 x 1.004583^60] / [1.004583^60 - 1] = $477.55, displayed as $478.

2$22,000 Used Car with Trade-In at 7% for 48 Months

Inputs

Car Price$22,000
Down Payment$3,000
Trade-In Value$4,000
Interest Rate7%
Loan Term48 months

Result

Monthly Payment$359
Loan Amount$15,000
Total Interest$2,246
Total Cost$17,246

Principal = $22,000 - $3,000 - $4,000 = $15,000. Monthly rate = 7% / 12 = 0.5833%. Payment = $15,000 x [0.005833 x 1.005833^48] / [1.005833^48 - 1] = $359.30, displayed as $359.

Formulas Used

Monthly Car Payment

M = P x [r(1+r)^n] / [(1+r)^n - 1]

Standard amortizing loan payment formula used to calculate the fixed monthly payment on a car loan.

Where:

M= Monthly payment
P= Principal (Car Price - Down Payment - Trade-In)
r= Monthly interest rate (Annual Rate / 12 / 100)
n= Number of monthly payments (loan term in months)

Total Interest

Total Interest = (Monthly Payment x Number of Payments) - Principal

The total amount of interest paid over the life of the loan.

Where:

Monthly Payment= The calculated fixed monthly payment
Number of Payments= Loan term in months
Principal= The loan amount financed

Understanding Car Loans

A car loan allows you to purchase a vehicle by borrowing money and repaying it over time with interest.

Your monthly payment depends on the loan amount, interest rate, and loan term.

Making a larger down payment reduces both your monthly payment and total interest paid over the life of the loan.

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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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