Principal vs. interest
How much of everything you repay is the amount financed versus interest. Updates as you change the inputs.
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Auto Loan Calculator
Estimate your monthly car payment, compare loan lengths, and see how much interest the dealership or lender will collect over time.
Estimated monthly payment
$520
Loan amount$23,000
Total paid$31,200
Total interest$8,200
Payoff timeline60 months
What is an auto loan calculator?
An auto loan calculator estimates the real cost of financing a car. It starts from the vehicle price, subtracts your trade-in and down payment to find the amount you actually finance, then works out your monthly payment, total interest, and how much you'll repay over the term, so you can compare deals before you're at the dealership.
How it works
The financed amount (principal) is the vehicle price minus your trade-in value and cash down payment. That balance is repaid with a fixed monthly payment using a standard amortization formula. A longer term lowers the monthly payment but increases total interest, and raises the risk of owing more than the car is worth as it depreciates.
M = P × [ r(1+r)^n ] / [ (1+r)^n − 1 ]
M = monthly payment
P = amount financed (price − trade-in − down payment)
r = monthly interest rate (APR ÷ 12)
n = total number of monthly payments
M = monthly payment
P = amount financed (price − trade-in − down payment)
r = monthly interest rate (APR ÷ 12)
n = total number of monthly payments
Worked example
For a $32,000 vehicle with a $4,000 trade-in and $5,000 down, financed at 6.5% APR over 60 months:
| Item | Amount |
|---|---|
| Amount financed | $23,000 |
| Monthly payment | ~$450 |
| Total interest paid | ~$3,982 |
| Total of all payments | ~$26,982 |
Tips to pay less for your car
- Put more down or apply a trade-in, both reduce the amount financed and the interest you pay.
- Choose the shortest term you can comfortably afford to cut total interest and avoid being "underwater."
- Get pre-approved from your own bank or credit union, then let the dealer try to beat that rate.
- Compare on APR, not just the monthly payment, dealers can lower the payment by stretching the term.
Frequently asked questions
How is an auto loan payment calculated?
From the amount financed (price minus trade-in and down payment), the APR, and the term, using a standard amortization formula.
How much car can I afford?
A common guideline keeps total transportation costs, payment plus insurance, fuel, and maintenance, within about 10-15% of your take-home pay.
Does a longer term reduce the monthly cost?
Yes, but you pay much more total interest, and a long term raises the risk of owing more than the car is worth.
Will a trade-in or down payment lower my payment?
Yes. Both reduce the amount financed, which lowers the monthly payment and total interest.
Is APR the same as the interest rate?
Not quite, APR includes the interest rate plus most lender fees, so it's the better number for comparing offers.
Should I buy new or used?
Used cars usually cost less and depreciate slower; new cars may offer better warranties and promotional financing. It depends on your budget and how long you'll keep it.