Auto Loan Calculator
Monthly
$0.00
Total Paid
$0.00
Total Interest
$0.00
How Car Loan Payments Work
Your monthly car payment is determined by the amount financed (vehicle price minus down payment and trade-in), the annual interest rate, and the loan term. Payments are calculated using standard amortization — each payment covers that month's interest first, with the remainder reducing your principal balance.
Amount Financed
Example
A $32,000 car with a $5,000 down payment at 6.9% for 60 months:
- Amount financed: $27,000
- Monthly payment: $533
- Total paid: $31,980 — interest: $4,980
Tips for Getting a Better Rate
- Get pre-approved from your bank or credit union before visiting a dealership. This gives you a rate benchmark and negotiating power.
- A 20% down payment helps you avoid being underwater on the loan as the car depreciates in its first year.
- Shorter loan terms cost less in total interest even if the monthly payment is higher. A 48-month loan on $27,000 at 6.9% saves over $1,200 vs. 60 months.
- Your credit score has the biggest impact on your rate. Scores above 720 typically qualify for the best rates.
Frequently Asked Questions
What is a good interest rate for a car loan?
As of 2024, average new car loan rates range from around 5% to 8% for buyers with good credit (700+). Used car rates are typically 1–3% higher. Credit unions often offer lower rates than dealerships. Always get pre-approved before visiting a dealership so you have a benchmark.
Should I put money down on a car?
A down payment of 20% is the traditional recommendation. It reduces your loan amount, lowers your monthly payment, and helps you avoid being "upside down" (owing more than the car is worth) as the vehicle depreciates. Even 10% helps meaningfully.
What loan term should I choose?
Shorter terms (36–48 months) mean higher monthly payments but far less total interest. Longer terms (72–84 months) are lower per month but cost significantly more in interest and extend the period where you may owe more than the car is worth. 60 months is a common middle ground.
Does a trade-in reduce my taxable amount?
In most US states, yes. The trade-in value is often subtracted from the purchase price before sales tax is calculated, which can save you a meaningful amount. Rules vary by state — check your local DMV or tax authority.