Auto Loan (Car Payment) Calculator
Work out your monthly car payment before visiting the dealership — and see the number they won't show you: what the car actually costs once interest is included.
How to use this calculator
- Enter the on-road vehicle price (including taxes and fees, not the sticker).
- Enter your down payment — 20% down keeps you ahead of depreciation.
- Enter the rate your lender quotes and pick a term.
- Compare terms: shorter terms cost more monthly but far less in total.
Formula used
Where L = price − down payment, i = monthly rate, N = months. Same reducing-balance math as any amortized loan.
Example calculation
A 1,200,000 car with 240,000 down at 9.5% over 5 years:
Loan = 960,000 → payment = 20,162/month. Total interest ≈ 249,700, so the car truly costs about 1,449,700.
Financing a car sensibly
Cars are depreciating assets financed with interest — a combination that punishes over-borrowing. A vehicle loses roughly 15–25% of its value in year one, so small down payments and long terms can leave you "underwater": owing more than the car is worth.
The classic guardrail is 20/4/10: 20% down, no more than a 4-year term (5 at a stretch), and total transport costs under 10–15% of income. Longer terms exist to make expensive cars feel affordable monthly — the total-cost row shows what that feeling costs.
Why use this calculator?
- Walk into the dealership knowing your payment — negotiate the price, not the monthly.
- See total interest across terms and pick the shortest you can afford.
- Budget on the car's true financed cost, not the sticker price.
Frequently asked questions
What car payment can I afford?
A common rule keeps all vehicle costs — payment, insurance, fuel, maintenance — under 10–15% of take-home pay. Work backwards: find the payment that fits, then the price that produces it at your rate and term.
Is a longer car loan bad?
It lowers the payment but raises total interest and extends the underwater period where you owe more than the car's worth. 6–7 year terms on depreciating vehicles are how people end up trading in with negative equity.
Should I finance or pay cash for a car?
If loan rates exceed what your savings safely earn (usually true), cash or a large down payment wins financially. Financing makes sense when the rate is genuinely low or cash is needed for higher-interest debt or emergencies.