Calculate your monthly car loan payments, total interest, and loan costs. Compare different loan terms and down payment options to find the best auto financing deal.
An auto loan is a secured loan used to purchase a vehicle, where the car itself serves as collateral. Understanding the components of auto financing can help you secure better terms and save thousands of dollars over the life of your loan.
Your monthly payment depends on the loan amount (after down payment and trade-in), interest rate, and loan term. This calculator helps you compare different scenarios to find the most affordable financing option.
The principal amount you'll be borrowing
Where: P = Payment, L = Loan amount, c = Monthly interest rate, n = Number of payments
Total amount paid in interest over the loan term
| Credit Score Range | Average New Car Rate | Average Used Car Rate | Credit Category |
|---|---|---|---|
| 781-850 | 4.5% - 5.5% | 5.5% - 6.5% | Super Prime |
| 661-780 | 5.5% - 7.5% | 6.5% - 9.5% | Prime |
| 601-660 | 7.5% - 11.5% | 9.5% - 15.5% | Near Prime |
| 501-600 | 11.5% - 17.5% | 15.5% - 20.5% | Subprime |
| 300-500 | 17.5% - 25%+ | 20.5% - 29%+ | Deep Subprime |
| Loan Term | Typical Use | Pros | Cons |
|---|---|---|---|
| 24-36 months | Used cars, fast payoff | Low total interest, build equity fast | High monthly payments |
| 48-60 months | New/used cars, balanced | Moderate payments, reasonable interest | Longer payoff period |
| 72-84 months | Expensive vehicles | Lower monthly payments | High total interest, underwater risk |
Gives you negotiating power and budget clarity
Banks, credit unions, online lenders, and dealers
Don't focus only on monthly payment amount
| Lender Type | Pros | Cons | Best For |
|---|---|---|---|
| Credit Unions | Low rates, member benefits | Membership required | Members with good credit |
| Banks | Competitive rates, existing relationships | Strict credit requirements | Customers with established credit |
| Online Lenders | Quick approval, convenience | Less personal service | Tech-savvy borrowers |
| Dealer Financing | Convenience, promotions | May have higher rates | One-stop shopping preference |
When to Refinance: If rates have dropped, your credit has improved, or you need lower payments.
Best Timing: Within first 2-3 years when you still owe a significant amount.
Requirements: Vehicle typically must be less than 10 years old with under 100,000 miles.
Break-even Analysis: Ensure savings exceed any refinancing fees.
Focusing Only on Monthly Payment: Longer terms mean more total interest paid.
No Down Payment: Leads to immediate negative equity and higher payments.
Not Shopping Around: Missing out on better rates and terms.
Rolling Negative Equity: Adding underwater amount from trade-in to new loan.
Extended Warranties: Often overpriced and can be purchased separately later.
Gap Insurance: Covers difference between loan balance and vehicle value if totaled.
When Needed: Low down payment, long loan term, rapidly depreciating vehicle.
Cost: $500-700 from dealer, $20-40/year from auto insurer.
Duration: Most beneficial in first 2-3 years when depreciation is highest.
| Program Type | Typical Rate | Requirements | Duration |
|---|---|---|---|
| Manufacturer 0% APR | 0% | Excellent credit, specific models | 24-60 months |
| College Graduate | Rate reduction | Recent graduate, employment proof | Varies |
| Military/Veterans | Rate reduction | Service verification | Standard terms |
| First-time Buyer | Competitive rates | No previous auto loans | Standard terms |