Car Loan Calculator

Estimate your monthly auto loan liability, total interest costs, and the true cost of ownership for your next vehicle.

Loan Parameters

Vehicle Price

Down Payment

Trade-in Value

Loan Term (Months)

Annual Rate (%)

Loan Breakdown

Monthly Payment$387

Total Interest$3,199

Total Out-of-Pocket$28,199

Value Distribution

Loan Principal

Total Interest

Total out-of-pocket includes your down payment and trade-in value plus all future principal and interest payments.

Overview

A car loan is a simplified amortization instrument. Unlike a mortgage, auto loans are usually calculated with daily simple interest, meaning interest is calculated based on the balance on the day the payment is received. The three main levers of a car loan are the principal amount (price minus down payment/trade-in), the interest rate (APR), and the term length in months.

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Pro Tips

What is the 'Rule of 78s'?: Some car loans use the 'Rule of 78s,' a method of precalculating interest that front-loads it even more than standard amortization. Most modern auto loans use simple interest instead.
How does loan term affect cost?: A longer loan term (72+ months) lowers your monthly payment but significantly increases the total interest you pay over the life of the loan.
Is APR different from Interest Rate?: Yes. The interest rate is the cost of borrowing the principal. APR includes the interest rate plus any loan fees or other costs charged by the lender.

Fun Facts

"Cars typically depreciate about 10% the moment they are driven off the lot."
"The average monthly car payment in the US has surpassed $700 for new vehicles in recent years."
"A higher down payment not only lowers your monthly liability but can also help you qualify for lower APR brackets."

Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]

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