Monthly Car Payment Calculator
Calculate monthly car loan payment from vehicle price, trade-in, down payment, APR, and term.
Shows total interest and amortization for 24 to 84 months.
Monthly Payment
Monthly car loan payments are calculated using the standard amortizing loan formula, the same formula used by banks and credit unions worldwide:
M = P × [r(1+r)^n] / [(1+r)^n − 1]
Where:
- M = Monthly payment
- P = Principal (loan amount = Purchase Price − Down Payment − Trade-in)
- r = Monthly interest rate = Annual Rate / 12
- n = Total number of payments = Loan Term (years) × 12
Total Cost of Loan:
Total Paid = M × n
Total Interest Paid = Total Paid − P
Worked Example:
- Car price: $28,000
- Down payment: $3,000
- Trade-in: $2,000
- Principal P = $28,000 − $3,000 − $2,000 = $23,000
- Annual rate: 6.5% → Monthly rate r = 6.5/12/100 = 0.005417
- Term: 60 months
- M = 23,000 × [0.005417 × (1.005417)^60] / [(1.005417)^60 − 1]
- (1.005417)^60 ≈ 1.3829
- M = 23,000 × [0.005417 × 1.3829] / [1.3829 − 1]
- M = 23,000 × 0.007491 / 0.3829 = 23,000 × 0.019566 ≈ $449.82/month
Total paid = $449.82 × 60 = $26,989 Total interest = $26,989 − $23,000 = $3,989
Reference: Average new car loan in 2024 = $40,657 at 7.1% for 68 months ≈ $726/month. A shorter term (48 vs 72 months) dramatically reduces total interest paid — typically $1,500–$4,000 in savings on a $25,000 loan.