See your monthly payment and the total cost of financing your next vehicle.
An auto loan calculator estimates the monthly payment on your next vehicle, including sales tax and any trade-in, plus the total interest you'll pay. Enter the price, down payment, rate, and term to see what financing really costs.
Stretching a car loan to 72 or 84 months lowers the monthly payment, which is why dealers often lead with it, but it raises total interest and keeps you “underwater” (owing more than the car is worth) for longer, since cars depreciate quickly. Whenever you can, choose the shortest term whose payment fits your budget, and compare the total-cost figures above, not just the monthly number.
A low promotional APR can make financing attractive even if you could pay cash, since your money might earn more elsewhere. But 0% offers sometimes replace a rebate, so weigh the discount you'd give up. Getting pre-approved by your own bank or credit union before you shop gives you a rate to beat and removes the pressure of dealer financing.
New cars carry the lowest advertised rates and the steepest depreciation, losing roughly 20% of their value in the first year. Used cars cost less to buy and depreciate more slowly, but usually carry slightly higher loan rates and may need repairs sooner. A one-to-three-year-old vehicle often hits the sweet spot: someone else absorbed the sharpest depreciation, yet the car still has most of its useful life and may qualify for near-new financing. The right choice depends on your budget, how long you keep cars, and how much value retention matters to you.
Auto lenders price loans by credit tier, and the gap between tiers is large. A borrower with excellent credit might finance at a low single-digit rate while someone with poor credit pays two or three times as much, adding thousands over the loan. Before shopping, check your score, and consider getting pre-approved by your bank or credit union so you walk into the dealer with a rate to beat. Dealer financing can be competitive, especially with manufacturer incentives, but comparing it against an outside pre-approval is the only way to know you are getting a fair rate.
Stretching a loan to 72 or 84 months makes almost any car look affordable on a monthly basis, which is exactly why dealers lead with the payment. The catch is that longer terms pile on interest and keep you underwater, owing more than the car is worth, for years, because cars depreciate faster than a long loan pays down. A shorter term costs more per month but far less overall and builds equity sooner. As a rule of thumb, if you can only afford a car on a 7-year loan, it is probably more car than your budget supports.
In the early years of a long loan, your balance can exceed the car's value, so if the vehicle is totaled or stolen, insurance pays only what it is worth, leaving you owing the difference. Gap insurance covers that shortfall and is worth considering when you put little down or finance for a long term. The best defense, though, is a solid down payment and a reasonable term, which keep you above water and reduce both interest and risk. The calculator's total-cost view helps you see how down payment and term change your exposure.
The loan payment is only part of what a car costs. Insurance, fuel, maintenance, registration, and depreciation together often rival or exceed the payment itself, and they vary widely by model. A cheaper car with high insurance and poor fuel economy can cost more to own than a pricier, efficient one. Before committing, estimate the all-in monthly cost, not just the financing, and check insurance quotes for the specific vehicle. Budgeting for total ownership prevents the surprise of an affordable payment attached to an unaffordable car.
Financing is not the only way to get a car. Leasing pays for the depreciation you use over a few years plus a rent charge, then you hand the car back, which usually means a lower monthly payment but no ownership and mileage limits. Buying costs more per month but eventually leaves you with a paid-off asset you can drive for years payment-free or sell. Over the long run, buying and keeping a car is almost always cheaper, because you capture the value that leasing never builds. Leasing can make sense if you value driving a new car every few years, stay within the mileage cap, and prefer predictable costs over building equity. Whichever route you choose, the total cost, payments, insurance, maintenance, and the value you keep, is the honest basis for comparison, not the monthly payment alone.
The amount financed (price plus tax, minus down payment and trade-in) is amortized over the loan's months at your APR. Longer terms lower the payment but raise total interest.
A longer term reduces the monthly payment but increases total interest and the risk of owing more than the car is worth. Compare terms before deciding.
Yes, sales tax is applied to the price less trade-in and financed with the loan. It excludes registration and dealer fees.
You can finance a car across a wide score range, but rates improve sharply with your score. Scores in the 700s unlock the lowest APRs; lower scores mean higher rates. Getting pre-approved shows you the rate you actually qualify for.
Yes. A pre-approval from your bank or credit union gives you a rate to beat and negotiating leverage. Dealer financing may still win with incentives, but you will not know unless you have an outside offer to compare.
See the exact formula and a worked example on our methodology page.