Auto Loan Calculator
Updated · By the CalculatorDash editorial team · How we check our maths
Quick answer
Your car payment depends on the amount financed (price plus tax, minus down payment and trade-in), the APR and the term. A $35,000 car with 7% sales tax and $5,000 down, financed at 6.9% for 60 months, costs about $641 a month and roughly $6,000 in interest.
How this calculator works
Dealers like to talk about the monthly payment because it hides the total. This calculator shows both. It adds sales tax to the price, subtracts your down payment and trade-in to get the amount financed, then applies the standard amortising-loan formula.
Longer terms lower the payment but raise the total interest, and they leave you owing more than the car is worth for longer, because cars lose value fastest in the first two or three years. A 60-month term or shorter is a common rule of thumb.
Your APR depends heavily on your credit score and on whether the car is new or used. Getting pre-approved by a bank or credit union before visiting the dealer gives you a rate to compare against the dealer's financing offer.
The formula
- Amount financed
- price × (1 + sales tax) − down payment − trade-in
- Monthly payment
- financed × r × (1 + r)^n ÷ ((1 + r)^n − 1), with r = APR ÷ 12 and n = months
- Total interest
- payment × months − amount financed
Worked example
A $35,000 car with 7% sales tax comes to $37,450. With $5,000 down you finance $32,450. At 6.9% APR over 60 months the payment is about $641, and you pay about $6,011 in interest over the loan.
Tips
- 01Compare offers by APR and total cost, not by monthly payment.
- 02Negotiate the price of the car before you discuss financing or your trade-in.
- 03Put down at least enough to cover tax and fees so you don't start the loan underwater.
Frequently asked questions
How is a car payment calculated?
Take the amount financed, the monthly interest rate (APR ÷ 12) and the number of months, and apply the amortisation formula: payment = P × r × (1 + r)^n ÷ ((1 + r)^n − 1).
Is a 72-month car loan a bad idea?
It lowers the payment but usually comes with a higher rate and much more total interest, and you can owe more than the car is worth for years. Choose the shortest term you can comfortably afford.
Does a bigger down payment lower my interest rate?
Not always, but it reduces the amount you borrow and the total interest, and lenders may offer better terms when the loan-to-value is lower.
What is a good APR for a car loan?
It depends on your credit score and the market. Borrowers with excellent credit get the lowest advertised rates; check a bank or credit union as well as the dealer.