Auto Loan Calculator
Estimate your auto loan payment — enter the vehicle price, down payment, trade-in, term and APR to see your monthly payment, total interest and total cost, with optional sales tax.
How an auto loan payment is calculated
Your monthly car payment comes from three things: the amount financed, the APR and the loan term. The amount financed is the vehicle price minus your down payment and trade-in value, plus any sales tax and fees you roll into the loan. That balance is paid off over the term with the standard amortization formula, using the monthly rate (APR ÷ 12). Every payment is the same size, but early payments are mostly interest and later ones mostly principal as the balance shrinks.
payment = P × r ÷ (1 − (1 + r)−n)
Here P is the amount financed, r is the monthly rate (APR ÷ 12 as a decimal) and n is the number of months. The calculator above does this instantly and also shows the total interest and total cost, so you can see what the financing really adds on top of the sticker price.
A worked example: $30,000 at 7% over 60 months
Suppose you finance $30,000 at a 7% APR for 60 months (5 years). The monthly rate is 7% ÷ 12 = 0.5833% (0.005833 as a decimal). Plugging into the formula gives these figures:
| Item | Amount |
|---|---|
| Amount financed | $30,000.00 |
| Monthly payment | $594.04 |
| Total of 60 payments | $35,642.40 |
| Total interest paid | $5,642.40 |
So the financing adds about $5,642 in interest over five years. Drop the rate to 5% and the payment falls to roughly $566 with about $3,968 in interest; a $5,000 down payment on the same $30,000 car cuts the financed balance to $25,000 and the payment to about $495. Small changes to rate, term and down payment move the total cost by thousands.
Average car loan interest rates by credit score
Your APR is driven mostly by your credit score and by whether the car is new or used. Used-car loans run several points higher than new-car loans because used vehicles depreciate less predictably. As a rough guide, recent US industry averages by credit tier looked like this:
| Credit tier (score) | New car APR | Used car APR |
|---|---|---|
| Superprime (781–850) | ~4.6% | ~6.3% |
| Prime (661–780) | ~6.2% | ~8.8% |
| Nonprime (601–660) | ~9.7% | ~14.0% |
| Subprime (501–600) | ~13.4% | ~19.4% |
| Deep subprime (300–500) | ~16.0% | ~21.8% |
The overall market average has recently sat near 6.4% for new cars and 11.4% for used cars. These figures move with the wider rate environment, so treat them as a benchmark, not a quote — the only number that counts is the APR a lender actually offers you. Use that rate in the calculator above to see your real payment.
How the loan term changes what you pay
Most US auto loans run 36, 48, 60, 72 or 84 months. Stretching the term lowers the monthly payment but piles on interest and raises the risk of owing more than the car is worth. On the same $30,000 balance at 7% APR, the trade-off looks like this:
| Term | Monthly payment | Total interest |
|---|---|---|
| 36 months | $926 | $3,344 |
| 48 months | $718 | $4,469 |
| 60 months | $594 | $5,642 |
| 72 months | $512 | $6,864 |
| 84 months | $453 | $8,135 |
Going from 36 to 84 months drops the payment by about $473 a month but more than doubles the interest. A useful rule of thumb is the 20/4/10 rule: put at least 20% down, finance for no more than 4 years, and keep total vehicle costs (payment plus insurance) under 10% of your gross monthly income.
Down payment, fees and the amount financed
A bigger down payment or trade-in reduces the amount financed, which lowers both the payment and the total interest, and helps you avoid being “upside down.” A common target is 20% down on a new car and 10% on a used car. Beyond the price, several costs can be folded into the loan and raise the balance:
- Sales tax — charged in most states on the taxable purchase price (five states — Alaska, Delaware, Montana, New Hampshire and Oregon — have no state sales tax). Estimate it with the sales tax calculator.
- Documentation (“doc”) fee — a dealer paperwork charge that varies widely by state.
- Title and registration — state fees to title and plate the vehicle.
- Destination / freight — the cost to ship a new car to the dealer, typically about $900–$1,500.
Rolling fees and tax into the loan is convenient but means you pay interest on them too, so paying those costs up front lowers your total cost.
Trade-in value and sales-tax savings
In most states you pay sales tax only on the price after your trade-in is deducted, so a trade-in can save you tax as well as cash. For example, trading in a car worth $10,000 against a $40,000 vehicle in a state with an 8% rate means you are taxed on $30,000, not $40,000 — a saving of ($40,000 − $30,000) × 8% = $800. A handful of states do not offer this reduction and tax the full price: California, Hawaii, Kentucky, Maryland, Michigan, Montana, Virginia and the District of Columbia. Check your state’s rule before counting on the saving.
Where to get the loan: dealer vs. bank or credit union
You can finance through the dealer (who marks up and resells the loan from a captive or partner lender) or borrow directly from a bank, credit union or online lender before you shop. Getting preapproved first gives you a rate to beat and real negotiating leverage at the dealership. When you rate-shop, apply within a short window — usually about 14 days — so the credit-scoring models count the multiple hard inquiries as a single shopping event. Also weigh a manufacturer’s 0% or low-APR promotional financing against a cash rebate: the low rate is usually worth more on a large, longer loan, while the rebate often wins on a small or short one.
Being “upside down” and gap insurance
You are upside down (or underwater) when you owe more on the loan than the car is worth. New cars depreciate fastest in the first year, so long terms and small down payments make this more likely. It matters most if the car is totaled or stolen: your insurer pays only the car’s value, leaving you to cover the gap. Gap insurance covers that difference and is worth considering on a long-term, low-down-payment loan. A larger down payment and a shorter term are the simplest ways to stay right-side up.
Related calculators
To start from a target monthly budget instead of a price, use the car payment calculator. For a home loan the same amortization math applies in the mortgage calculator. To see what investing the cash instead might earn, try the compound interest calculator, and to pay down several balances by interest rate, the debt avalanche calculator. Fees and points make the true cost higher than the sticker rate — compare loans on the APR calculator.
For general information only — not financial advice. Results are estimates based on the figures you enter; actual loan terms, APR, taxes and fees depend on your lender, credit and state. Average rates shown are benchmarks that change over time. Verify any quote against your loan agreement. Sources: Consumer Financial Protection Bureau (CFPB), the Federal Reserve and Experian.
Car payment by brand
Estimate a payment with a typical example for a popular model:
Frequently asked questions
What is the average interest rate on a car loan right now?
Recent US averages have been around 6.4% APR for new cars and 11.4% for used cars, but your rate depends heavily on your credit score. Superprime borrowers (781+) often see roughly 4.6% on new cars, while deep-subprime borrowers can pay 16% or more. Used-car rates run several points above new-car rates. These are benchmarks that move with the wider rate market, so use the actual APR a lender quotes you in the calculator above.
Does a trade-in reduce the sales tax on a car?
In most states, yes. You are taxed only on the price after the trade-in is deducted, so trading in a $10,000 car against a $40,000 vehicle at an 8% rate saves ($40,000 - $30,000) x 8% = $800 in tax. A few states tax the full price with no reduction, including California, Hawaii, Kentucky, Maryland, Michigan, Montana, Virginia and Washington, D.C. Check your state's rule before counting on the saving.
What does it mean to be upside down on a car loan?
Being upside down (or underwater) means you owe more on the loan than the car is currently worth. It happens most with long terms, small down payments, and the steep depreciation new cars take in the first year. It matters if the car is totaled or stolen, because insurance pays only the car's value and you still owe the rest. Gap insurance covers that difference; a larger down payment and shorter term help you avoid the situation.
Should I finance through the dealer or my own bank?
Both can work, but getting preapproved by a bank, credit union or online lender before you shop gives you a rate to beat and real leverage at the dealership, which may still match or beat it. When comparing offers, submit your applications within about a 14-day window so the credit bureaus treat the multiple hard inquiries as one. Also weigh a manufacturer's 0% or low-APR promotion against a cash rebate: the low rate usually wins on a larger or longer loan, the rebate on a smaller or shorter one.
How do I calculate my auto loan payment?
Take the amount financed — vehicle price minus your down payment and trade-in, plus any sales tax rolled in — and apply the monthly interest rate (APR ÷ 12) over the number of months in the standard loan formula. For example, a $30,000 loan at 7% APR over 60 months is about $594 a month. Enter your numbers above and it’s calculated instantly.
What is a good interest rate on a car loan?
Rates depend heavily on your credit score, the lender and whether the car is new or used. Borrowers with strong credit often see the lowest advertised APRs, while lower scores pay several points more. Compare offers, and try different APRs above to see how much the rate changes your payment.
How does the loan term affect my car payment?
A longer term (72 or 84 months) lowers the monthly payment but means more total interest and a higher chance of owing more than the car is worth. A shorter term (36–48 months) costs more per month but far less interest overall. The calculator shows both the payment and total interest so you can balance them.
Should I make a bigger down payment?
A larger down payment (or trade-in) reduces the amount financed, which lowers your monthly payment and total interest and helps you avoid being “upside down” on the loan. Even a few thousand dollars makes a visible difference — adjust the down payment above to see it.