Car Loan Calculator
Calculate your monthly car payment, total interest, and total cost of your auto loan.
See how loan term and interest rate affect what you pay.
Car loan payment calculations use the standard amortized loan formula to determine the fixed monthly payment that pays off both principal and interest over a set term.
Monthly payment formula: M = P × [r(1+r)^n] ÷ [(1+r)^n − 1]
Where:
- M = monthly payment amount ($)
- P = principal — the amount borrowed (vehicle price minus down payment and trade-in value)
- r = monthly interest rate = annual APR ÷ 12 ÷ 100
- n = total number of monthly payments = loan term in years × 12
- ^ = exponentiation (raised to the power of)
Total cost of loan: Total Paid = M × n
Total interest paid: Total Interest = Total Paid − P
What each variable means:
- Principal (P) — the financed amount; a $30,000 car with $5,000 down = $25,000 principal
- APR — Annual Percentage Rate; includes interest plus any lender fees; always use APR (not the “interest rate”) for accurate comparison
- Loan term (n) — common terms are 36, 48, 60, 72, and 84 months; longer terms lower the payment but dramatically increase total interest
- Down payment — each $1,000 extra down directly reduces principal by $1,000; the monthly payment savings compound through the entire loan
Reference: typical new car loan APRs (US, 2024):
- Excellent credit (750+): 4–6% APR
- Good credit (700–749): 6–8% APR
- Fair credit (650–699): 8–12% APR
- Poor credit (below 650): 12–20%+ APR
Worked example: Vehicle price: $32,000. Down payment: $5,000. Trade-in: $3,000. APR: 6.5%. Term: 60 months.
- Principal (P) = $32,000 − $5,000 − $3,000 = $24,000
- Monthly rate (r) = 6.5 ÷ 12 ÷ 100 = 0.005417
- n = 60 months
- M = 24,000 × [0.005417 × (1.005417)^60] ÷ [(1.005417)^60 − 1]
- (1.005417)^60 = 1.3831
- M = 24,000 × [0.005417 × 1.3831] ÷ [1.3831 − 1]
- M = 24,000 × [0.007493] ÷ [0.3831]
- M = 24,000 × 0.01957 = $469.67/month
- Total paid = $469.67 × 60 = $28,180
- Total interest = $28,180 − $24,000 = $4,180
Compare: at 84 months (7 years), the monthly payment drops to ~$353/month but total interest rises to ~$5,670 — you pay $1,490 more for a lower monthly payment.