What is a good interest rate for a car loan?

In 2024, average auto loan rates are 5-8% for new cars and 8-12% for used cars, depending on credit score. Rates below 5% are excellent; above 15% is considered high.

Should I make a down payment?

A larger down payment reduces your loan amount, monthly payment, and total interest. Most advisors suggest 10-20% down on a new car to avoid being "underwater" on the loan.

How does the loan term affect the total cost of a car?

Longer terms lower the monthly payment but raise total interest. A $30,000 loan at 7% costs about $594/month over 5 years versus $445 over 7 years, yet the 7-year option pays roughly $1,800 more in interest.

Should I include trade-in value in the calculation?

Yes. A trade-in reduces the amount financed just like a cash down payment. Trading in a car worth $8,000 on a $30,000 vehicle means you only finance $22,000, lowering both the payment and total interest.

What extra costs are not included in the monthly payment?

Your loan payment excludes insurance, registration, taxes, fuel and maintenance. Budget for these separately — full-coverage insurance alone can add $100–$200 a month depending on the car and driver.

Is it better to lease or buy a car?

Leasing usually has lower monthly payments but you own nothing at the end; buying costs more monthly but builds equity. If you keep cars long-term, buying is typically cheaper over the vehicle’s life.

How much should I put down on a car?

A common guideline is 20% down on a new car and 10% on a used one to offset depreciation and avoid owing more than the car is worth. A larger down payment also lowers your monthly payment and total interest.

Car Loan Calculator — Auto Loan Payment

Total car cost: down payment, principal, interest, tax and fees
Category	Total car cost: down payment, principal, interest, tax and fees
Down + trade-in	$5,000.00
Loan principal	$30,000.00
Interest	$5,219.00
Tax + fees	$0.00

Month	Payment	Principal	Interest	Balance
1	$586.98	$424.48	$162.50	$29,575.52
2	$586.98	$426.78	$160.20	$29,148.73
3	$586.98	$429.10	$157.89	$28,719.64
4	$586.98	$431.42	$155.56	$28,288.22
5	$586.98	$433.76	$153.23	$27,854.46
6	$586.98	$436.11	$150.88	$27,418.35
7	$586.98	$438.47	$148.52	$26,979.89
8	$586.98	$440.84	$146.14	$26,539.04
9	$586.98	$443.23	$143.75	$26,095.81
10	$586.98	$445.63	$141.35	$25,650.18
11	$586.98	$448.05	$138.94	$25,202.13
12	$586.98	$450.47	$136.51	$24,751.66
⋮ 48 more months ⋮
Total	$35,219.07	$30,000.00	$5,219.07	$0.00

How to use Car Loan Calculator

This car loan calculator estimates your monthly auto payment and the true cost of financing a vehicle. Factor in the price, down payment, trade-in value, sales tax and loan term to get an accurate payment, then see how much of the total goes to interest. Comparing a shorter term or a larger down payment here can save you hundreds or thousands over the life of the loan.

Enter the vehicle price.
Add your down payment and any trade-in value.
Include the sales tax rate if you want tax financed in.
Set the interest rate (APR) and loan term.
Review the monthly payment, total interest and amount financed.

Your data never leaves your device — 100% private processing.

What goes into a car payment

The amount financed is the price plus sales tax and fees, minus your down payment and trade-in. Your monthly payment is then the EMI on that amount at the loan’s APR. A bigger down payment or trade-in lowers both the payment and the total interest, and helps avoid being "underwater" (owing more than the car is worth) as it depreciates.

Term length, depreciation and negative equity

Long 72- and 84-month auto loans lower the monthly payment but mean you pay far more interest and stay underwater longer because cars depreciate fastest in the first years. A shorter term with a payment you can afford is usually the cheaper, safer choice. Always compare dealer financing against a pre-approved bank or credit-union rate.

Auto loan term comparison — $25,000 at 7%
Term	Monthly payment	Total interest	Total cost
36 months	~$772	~$2,785	~$27,785
48 months	~$598	~$3,713	~$28,713
60 months	~$495	~$4,681	~$29,681
72 months	~$427	~$5,694	~$30,694

Worked examples

New car

Inputs: $32,000 · $4k down · 6.5% · 60 mo

Result: ~$548/mo · ~$4,860 interest

Shorter term

Inputs: same, 48 mo

Result: ~$665/mo · ~$3,830 interest

Glossary

APR: The annual percentage rate charged on the auto loan, including most fees.
Amount financed: Price plus tax and fees, minus down payment and trade-in.
Trade-in: The value your old vehicle is credited toward the new purchase.
Negative equity: Owing more on the loan than the car is currently worth.

Related Finance

Credit Card Payoff Calculator

Calculate how long it will take to pay off credit card debt. See total interest cost and compare different payment strategies. Free debt payoff calculator.

Income Tax Estimator

Estimate your 2024 US federal income tax. See your effective rate, marginal rate, and tax by bracket. Free online income tax calculator.

Loan Calculator

Calculate your loan monthly payment, total interest, and payoff. Compare rates and terms instantly with this free online personal loan calculator.

Mortgage Calculator

Calculate your monthly mortgage payment, total interest, and see a full amortization schedule. Free online mortgage calculator.

Savings Goal Calculator

Calculate how long it takes to save for a financial goal or how much to save per month. Includes interest rate. Free savings target calculator.

Compound Interest Calculator

Calculate compound interest with monthly contributions. See how your investment grows over time with our free compound interest calculator.

Explore all Finance.

Car Loan Calculator

Amortization schedule (first 12 months)

How to use Car Loan Calculator

What goes into a car payment

Term length, depreciation and negative equity

Worked examples

Glossary

Related reading

Frequently Asked Questions

Why use Car Loan Calculator?

Common use cases

Get weekly tool tips & updates

Related Finance