Auto Loan Calculator

1. Pick a vehicle preset or enter your numbers. The Economy, Midsize, SUV, Truck, and Used presets load realistic 2025 prices and average rates to give you a baseline. Adjust any field and the preset clears so your numbers take over.
2. Enter the vehicle price. Use the negotiated out-the-door price or the sticker price as your starting point. You can enter the price before tax since the calculator adds sales tax separately.
3. Enter your down payment and trade-in value. Both reduce the loan amount directly. A larger down payment lowers your monthly payment and total interest. Check Kelley Blue Book or CarGurus for accurate trade-in estimates before visiting the dealer.
4. Enter the sales tax rate. Most US states charge 5-10%. Five states have no sales tax (Alaska, Delaware, Montana, New Hampshire, Oregon). Sales tax is usually rolled into the loan, not paid upfront.
5. Enter the APR. Get pre-approved by your bank or credit union before visiting the dealer. Dealer financing is convenient but rarely offers the best rate. Enter the annual percentage rate from your pre-approval letter, then see if the dealer can beat it.
6. Select the loan term. 60 months is the most common. Longer terms lower monthly payments but increase total interest significantly. Use the Loan Balance chart to see how quickly you pay down principal for each term.
7. Add extra payments (optional). Click "Extra Payments" to model monthly, yearly, or one-time extra principal payments. The green savings banner shows exactly how much interest you save and how many months you cut off the loan.
8. Review the charts. Switch between Loan Balance, Annual Breakdown, and Cumulative to understand where your money goes at every stage of the loan.

Auto loan monthly payments use the standard amortization formula. The full cost calculation includes the vehicle price, sales tax, down payment, and trade-in:

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

Monthly Payment = L × [r(1+r)^n] / [(1+r)^n - 1]

Where:
L = Loan amount
r = Monthly interest rate (APR ÷ 12)
n = Number of monthly payments

Example: $32,000 vehicle, $5,000 down, 8% sales tax, 6.9% APR, 60 months:

Sales tax = $32,000 × 0.08 = $2,560
Loan amount = $32,000 + $2,560 - $5,000 = $29,560
Monthly rate r = 6.9% / 12 = 0.00575
Monthly payment = $29,560 × [0.00575(1.00575)^60] / [(1.00575)^60 - 1] = $582.17
Total payments = $582.17 × 60 = $34,930
Total interest = $34,930 - $29,560 = $5,370

How loan term affects total cost on a $29,560 loan at 6.9% APR:

Notice that going from 60 to 84 months saves only $138/month but costs an additional $1,460 in interest. The extra payments feature lets you shrink that gap by paying ahead on your own schedule.

Your credit score is the single biggest factor in the interest rate you receive. Lenders tier borrowers, and even one tier up can save thousands over the life of a loan:

Source: Experian State of the Automotive Finance Market, Q4 2024. Rates vary by lender and state. On a $30,000 loan for 60 months, the difference between a Super Prime rate (5.1%) and a Subprime rate (13.2%) is over $7,000 in additional interest.

If your score is below 700, spend 3-6 months improving it before buying. Pay down revolving credit card balances below 30% utilization. Fix any errors on your credit report. The interest savings will exceed almost any delay cost.

Used cars typically carry higher interest rates than new cars (lenders view older collateral as riskier), but the lower vehicle price usually more than compensates. Here is a realistic side-by-side:

The used car saves roughly $13,800 in total purchase cost. The trade-off is warranty coverage, potentially higher maintenance costs, and unknown vehicle history. Always get a pre-purchase inspection for any used car over $10,000.

Depreciation is the silent cost most buyers underestimate. A new car loses 15-25% of its value in the first year and roughly 50% over five years. This creates a window of negative equity (being "upside down") where you owe more than the car is worth:

In this example, a 20% down payment keeps equity positive throughout. Without a down payment on a 72- or 84-month loan, you could be underwater for the first 2-3 years. If the car is totaled during that period, insurance pays market value, not your loan balance. The gap between those two numbers is your out-of-pocket loss unless you have GAP insurance.

Guaranteed Asset Protection (GAP) insurance covers the difference between your car's market value and your remaining loan balance if the car is totaled or stolen. It is not always necessary:

Buy GAP insurance from an insurance company or your credit union, not from the dealer. Dealer-sold GAP averages $400-$700 and is rolled into your loan (so you pay interest on it). The same coverage from your insurer typically costs $20-$40/year added to your auto policy.

Dealership finance offices generate significant profit through financing. Understanding common tactics protects your wallet:

The rule: get your pre-approval before walking into the dealership. Separate the car price negotiation from the financing. Never mention your pre-approval or monthly payment target until the vehicle price is locked in writing.

The monthly loan payment is only one part of the true cost of owning a car. A full total cost of ownership (TCO) analysis over 5 years on a $32,000 vehicle:

Depreciation is often the largest single cost, dwarfing interest. Buying a 2-3 year old certified pre-owned vehicle lets the first owner absorb the steepest depreciation, often saving $8,000-$12,000 over 5 years while still getting a reliable car with some remaining factory warranty.

Refinancing replaces your current loan with a new one at a better rate. It makes sense when:

• Your credit score improved significantly since you took out the original loan. A 50-point increase can lower your rate by 2-3 percentage points.
• Market rates dropped. If rates have fallen 1.5%+ since you financed, refinancing likely saves meaningful money.
• You got dealer financing without shopping. Many buyers accept whatever rate the dealer offers. Checking your bank or credit union within 60 days of purchase often reveals a better rate.
• You have at least 12+ months left on the loan. Refinancing too close to the payoff date rarely saves enough to cover the administrative cost.

Refinancing usually involves no application fee and no hard credit inquiry hit beyond the initial pull. Most credit unions process auto refinance applications in 24-48 hours. Even saving 1.5% on a $20,000 balance saves roughly $1,000 over 3 years.