Car finance calculator
This car finance calculator compares two ways to finance the same car, dealer financing on one side and a credit union or bank loan on the other.
Where you can finance a car
Dealers arrange financing through banks and the manufacturer’s finance arm, and they may add a markup to the rate they are offered. Banks and credit unions lend directly, and credit unions often have the lowest rates for members. Online lenders sit in between and can be quick, but compare their fees.
Enter the dealer’s quote as Loan A and your pre-approval as Loan B, and the summary shows how much one saves over the other.
Compare the whole offer
A lower rate is only better if the term and amount financed are the same. Watch for add-ons rolled into the loan, such as extended warranties and gap insurance, and for fees or prepayment penalties. Compare the APR, the term and the total cost, and ask for the figures in writing.
The two loans compared
Loan A ($28,000 at 7.9% for 5 years) costs $566.40 a month and $5,984 in interest. Loan B ($28,000 at 6.2% for 5 years) costs $543.93 a month and $4,636 in interest. Loan B costs less in total, by $1,348, while its monthly payment is higher by $22.47.
| Loan A | Loan B | |
|---|---|---|
| Amount | $28,000 | $28,000 |
| Rate | 7.9% | 6.2% |
| Term | 5 years | 5 years |
| Monthly payment | $566.40 | $543.93 |
| Total interest | $5,984 | $4,636 |
| Total paid | $33,984 | $32,636 |
Frequently asked questions
Is it better to finance through the dealer or a bank?
Compare both. Dealers sometimes beat bank rates with manufacturer promotions, but a pre-approval gives you leverage and a rate to measure their offer against.
Does shopping for a car loan hurt my credit?
Several auto loan inquiries within a short window usually count as one inquiry for scoring, so you can compare lenders without much impact.
Related calculators
Estimates from standard loan formulas, not a loan offer or financial advice. Example rates are assumptions: use your own quote.