Auto Loan Calculator
Calculate monthly car payments, total interest, and analyze the full cost of your auto loan.
About This Calculator
This auto loan calculator helps you estimate your monthly car payment and total cost of financing. It includes sales tax and fees in the calculation to give you a more accurate picture of your actual costs. For educational purposes only. Actual loan terms may vary based on credit score, lender policies, and other factors.
How to Use This Calculator
This calculator helps you make informed financial decisions by providing accurate estimates based on the information you provide. Follow these steps:
Enter Your Details
Fill in all required fields with your financial information.
Adjust Parameters
Use sliders and toggles to customize scenarios and assumptions.
View Results
Get instant calculations that update as you change inputs.
Compare Options
Try different scenarios to find the best financial solution.
Understanding Auto Loans
Auto loans are a common method of financing vehicle purchases. Understanding the components and terms of auto loans can help you make better financial decisions and potentially save thousands of dollars over the life of the loan.
Key Auto Loan Components
- Principal: The amount borrowed, typically the vehicle price minus any down payment
- Interest Rate (APR): The annual cost of borrowing expressed as a percentage
- Loan Term: The length of time to repay the loan, typically 36-84 months
- Monthly Payment: The amount paid each month, including principal and interest
- Total Cost: The sum of all payments made over the life of the loan
Factors Affecting Auto Loan Terms
- Credit Score: Higher scores typically qualify for lower interest rates
- Loan-to-Value Ratio: The relationship between the loan amount and the vehicle's value
- Down Payment: A larger down payment often results in better loan terms
- Vehicle Age: Newer vehicles typically qualify for better rates than older ones
- Loan Term: Shorter terms usually have lower interest rates but higher monthly payments
- Current Market Rates: Prevailing interest rates in the broader economy
Common Auto Loan Mistakes to Avoid
- Focusing only on monthly payment: Lower payments often mean paying more in total interest
- Taking too long a loan term: Extended terms (72-84 months) increase total cost and risk being "underwater"
- Not shopping around: Rates can vary significantly between lenders
- Neglecting to negotiate the vehicle price: The loan is based on the purchase price, not MSRP
- Rolling negative equity into a new loan: Adding unpaid balance from a previous car to a new loan
- Skipping the loan payoff calculation: Understanding the payoff amount if you sell before the term ends
Auto Loan Financing Options
- Dealer Financing: Convenient but not always the best rates; dealers may mark up the rate
- Bank Loans: Direct lending from your bank; often with competitive rates for existing customers
- Credit Unions: Typically offer lower rates than traditional banks
- Online Lenders: Can offer competitive rates and convenient application processes
- Manufacturer Financing: Special low-rate or zero-interest promotions on new vehicles
Strategies for Lower Auto Loan Costs
- Improve your credit score: Even a small improvement can mean significant savings
- Make a larger down payment: Reduces the loan amount and may qualify you for better rates
- Choose a shorter loan term: Typically means lower interest rates and less total interest
- Get pre-approved: Shop for financing before visiting dealerships
- Consider refinancing: If your credit improves or rates drop, refinancing can save money
- Pay more than the minimum: Extra payments reduce principal and total interest paid