Car payment calculator

The calculator has five fields and updates instantly:

1. Vehicle price: the final negotiated price, after any discounts or rebates. 2. Down payment: the cash you pay upfront at signing. Enter 0 if you are putting nothing down. 3. Trade-in value: what the dealer offers for your current car if you hand it over. Leave 0 if you are not trading anything in. 4. Annual interest rate (%): the APR on your offer. In the U.S., average APRs have recently hovered around 6–7% for new cars and 10–12% for used cars, but your rate depends heavily on your credit score — borrowers with top-tier credit can see rates several points lower than subprime borrowers. 5. Loan term in months: 60 and 72 months are the most common terms; the calculator accepts 6 to 96 in steps of 6.

You get three results: the loan amount (price minus down payment minus trade-in), the fixed monthly payment, and the total interest paid over the life of the loan. The math uses the standard fixed-payment amortization formula every U.S. bank, credit union and captive lender applies: equal payments each month, with more interest at the start and more principal at the end.

First we compute the amount actually borrowed, then apply the standard fixed-payment loan amortization formula — the same math behind every auto loan, mortgage and personal loan.

Plain-text formulas:

L = price − down payment − trade-in

payment = L × r / (1 − (1 + r)^−n)

where:

• L = loan amount
• r = monthly rate = annual rate / 12 / 100
• n = term in months
• total interest = payment × n − L

If the rate is 0%, the payment is simply L / n.

Worked example: a $42,000 pickup, $6,000 down, $8,000 trade-in, 7% APR, 72 months.

1. L = 42,000 − 6,000 − 8,000 = $28,000 2. r = 7 / 12 / 100 = 0.00583333 3. (1 + r)^−72 = 0.65784908 4. 1 − 0.65784908 = 0.34215092 5. payment = 28,000 × 0.00583333 / 0.34215092 = $477.37 6. Total paid: 477.37 × 72 = $34,370.80 7. Total interest: 34,370.80 − 28,000 = $6,370.80

In other words, stretching $28,000 over six years costs about $6,371 in interest — roughly 22.8% on top of the amount borrowed.

The table compares four common U.S. scenarios, from a typical new-car deal to a zero-down purchase:

Three practical takeaways. First: a trade-in shrinks the loan exactly like extra cash down — in row two, the $12,000 trade keeps the payment on a $48,000 truck below $500. Second: stretching to 72 months lowers the payment but raises the cost; that same truck pays $6,564.73 in interest, 23.4% of the amount borrowed. Third: rate matters more than sticker price — the $28,000 used car at 9.5% APR (row three) pays nearly as much interest as the $35,000 new car at 6.5%, even though the loan is $10,000 smaller.

These mistakes distort the math or the buying decision:

• Comparing offers by the monthly payment alone. A dealer can hit almost any payment target by stretching the term from 60 to 84 months — but every extra month adds interest. Always compare total interest, not just the payment.
• Forgetting negative equity on the trade-in. If you still owe money on your current car, the trade-in only helps by its value minus the payoff amount. Owe $9,000 on a car worth $7,000 and the $2,000 gap gets rolled into the new loan, making it bigger than the price minus your cash down.
• Entering the wrong rate. Use the APR from your actual offer, not a teaser rate from an ad. Promotional 0.9% financing usually requires top-tier credit and often replaces a cash rebate — sometimes taking the rebate with a higher APR is cheaper overall.
• Ignoring taxes and fees. Sales tax, title, registration and dealer fees are often financed too. If they get rolled in, add them to the vehicle price field, or your real payment will be higher than the estimate.
• Confusing a loan with a lease. This calculator models a standard fully amortizing auto loan. A lease payment is computed differently (depreciation plus money factor) and is not comparable number for number.

This tool is for educational purposes only; it is not financial advice or a credit offer.

Before you sign, you want two numbers: the monthly payment ($586.98) and the total interest you will hand over during the life of the loan ($5,219.07). This calculator gives you both instantly. Enter the vehicle price, your down payment, the value of your trade-in if you are handing over your current car, the annual interest rate and the term in months. You get the amount actually financed, the monthly payment and the total interest cost, using the same standard amortization formula banks, credit unions and captive lenders use across the U.S. That makes it easy to compare offers side by side — a bigger down payment, a shorter term or a lower APR each move the payment more than you might expect, especially on 72- and 84-month loans.