Car loan calculator

Read the result in three numbers

Look at three figures, not one. The monthly payment tells you whether it fits your budget. The total interest tells you what the loan costs on top of the car. The total cost, price plus tax, fees and interest, tells you what you will really spend. A loan that looks cheap monthly can be the most expensive of the three.

Change one input at a time. Move the term from 60 to 48 months and watch the payment rise while the interest falls, then change the rate by a point to see what shopping around is worth.

Shop the loan before the car

Getting a car loan quote before you visit a dealer separates two negotiations, the price of the car and the price of the money. Ask a credit union and your bank for a pre-approval, then enter each rate here to see the dollar difference on your own car. The dealer can then try to beat the best one.

$30,600 financed: payment by loan length

At 6.9% APR, financing $30,600 (the $32,000 price plus 6.25% sales tax and $600 in fees minus $4,000 down) costs $604.47 a month over 60 months and $460.34 over 84 months. The longer loan lowers the payment by $144.13 but adds $2,400 in interest. Going the other way, 36 months raises the payment to $943.44 and cuts total interest to $3,364.

How the interest rate changes a 5-year loan

On the same $30,600 over 5 years, each full percentage point of APR moves the payment by about $14.52 and total interest by about $871. Rates depend on your credit score, the loan term and whether the car is new or used, so get a pre-approval from a bank or credit union before you walk into a dealership.

What a bigger down payment does

A down payment reduces what you finance, which cuts both the payment and the interest, and it protects you from owing more than the car is worth early in the loan, when new cars depreciate fastest. Here is the same $32,000 car at 6.9% over 5 years with different down payments.

Paying extra

Adding $100 a month to this loan would pay it off 9 months sooner and save $960 in interest, as long as your lender applies extra money to principal and charges no prepayment penalty. Ask before you start.

Can you afford a $32,000 car?

A common rule of thumb, the 20/4/10 guideline, suggests 20% down, a term of at most 4 years and total car costs under 10% of gross income. On payment alone, $604.47 a month points to a gross income of roughly $72,500 a year to stay at 10%, before insurance, fuel and maintenance. This loan departs from the guideline because the down payment is 13% rather than 20% and the term of 60 months is longer than 48, so the payment is lower than a stricter plan would give but the loan costs more overall.

Will you owe more than the car is worth?

New cars commonly lose around 20% of their value in the first year and roughly 15% a year after that, though this varies by model. Using that rough rule on a $32,000 car, the car stays worth more than the loan from the end of the first year. Gap insurance can cover the difference if the car is totaled while you are underwater.