Truck loan calculator

Why truck payments run higher

Full-size pickups regularly sell for well above the average new-car price, and buyers stretch to 72 or 84 months to keep the payment manageable. A longer term lowers the payment but multiplies the interest, so compare 60, 72 and 84 months in the table before you decide.

Trucks tend to hold their value better than many cars, which reduces the negative-equity risk, but a high-trim model bought with little down can still leave you underwater early on.

Costs beyond the loan payment

Insurance, fuel and tires cost more on a heavy truck. If you use the truck for work, ask your accountant whether business-use deductions apply, since the rules depend on weight rating and how you use the vehicle. For the loan itself, work-truck and commercial financing can carry different terms from consumer auto loans.

$53,775 financed: payment by loan length

At 7% APR, financing $53,775 (the $55,000 price plus 6.5% sales tax and $700 in fees minus $5,500 down) costs $1,064.81 a month over 60 months and $811.61 over 84 months. The longer loan lowers the payment by $253.20 but adds $4,287 in interest. Going the other way, 36 months raises the payment to $1,660.42 and cuts total interest to $6,000.

How the interest rate changes a 6-year loan

On the same $53,775 over 6 years, each full percentage point of APR moves the payment by about $26.04 and total interest by about $1,875. 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 $55,000 car at 7% over 6 years with different down payments.

Paying extra

Adding $100 a month to this loan would pay it off 8 months sooner and save $1,520 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 $55,000 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, $916.81 a month points to a gross income of roughly $110,000 a year to stay at 10%, before insurance, fuel and maintenance. Here the down payment is 10% rather than 20% and the term of 72 months is longer than 48, which means a smaller monthly payment in exchange for more interest and a longer period of debt.

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 $55,000 car, you would likely owe more than the car is worth until about year 3. Gap insurance can cover the difference if the car is totaled while you are underwater.