Calculate your auto loan monthly payment, total interest, and total cost including down payment and trade-in value.
An auto loan payment is calculated from three core inputs - loan amount, interest rate, and loan term - but the interest rate offered depends heavily on credit score, with borrowers in the top credit tiers often qualifying for rates several percentage points lower than those with fair or poor credit, a gap that can mean thousands of dollars difference in total cost over the loan's life for the exact same vehicle.
Longer loan terms (72 or 84 months have become increasingly common) lower the monthly payment but increase total interest paid substantially, and they also raise the risk of being "underwater" - owing more than the car is worth - for a longer period, since vehicles depreciate faster than a long loan term pays down the balance in the early years.
A larger down payment reduces the loan amount directly, which lowers both the monthly payment and total interest, and it also helps avoid being underwater on the loan early on, since a car's value typically drops fastest in its first year or two of ownership.
An auto loan's total cost depends on more than the vehicle price and interest rate alone — loan term length significantly affects total interest paid, with longer terms lowering the monthly payment but increasing total interest paid over the life of the loan, sometimes substantially. A 72 or 84-month loan term, increasingly common as vehicle prices rise, can result in meaningfully more total interest paid compared to a traditional 48 or 60-month term, even at an identical interest rate.
Trade-in value, down payment, and any rolled-over negative equity from a previous vehicle all affect the actual amount financed, which in turn affects the monthly payment and total interest — rolling negative equity from a previous loan into a new auto loan is a common way car buyers end up "underwater" (owing more than the vehicle is worth) on a new loan almost immediately after purchase.
Interest rates for used car loans are typically higher than new car loan rates, reflecting the higher risk lenders associate with older vehicles that depreciate faster and may have unknown maintenance history. This rate difference, combined with a used vehicle's typically lower price, means the actual total cost comparison between financing a new versus used vehicle requires running the full loan calculation rather than assuming a used car is automatically the cheaper financed option.
A larger down payment reduces your loan amount, monthly payment, and total interest paid. However, it also reduces your liquid savings. Consider your overall financial situation and emergency fund when deciding.
Shorter terms (36-48 months) have higher payments but less total interest. Longer terms (60-84 months) have lower payments but cost more in interest. Choose based on your budget and how long you plan to keep the vehicle.
Trade-in value reduces your loan amount similarly to a down payment. It's applied to the purchase price before calculating the loan. A higher trade-in value means a smaller loan and lower payments.
Interest rates vary based on credit score, loan term, and lender. As of 2025, rates for good credit (700+) typically range from 3-6% for new cars and 4-7% for used cars. Shop around and compare offers from multiple lenders.
Getting pre-approved before shopping can help you know your budget and negotiate better. It also simplifies the dealership process. Compare pre-approval offers from banks, credit unions, and online lenders for the best rates.
Significantly - borrowers with top-tier credit often qualify for rates several percentage points lower than those with fair or poor credit, which can mean thousands of dollars difference over the loan term.
Not necessarily, but longer terms increase total interest paid and raise the risk of owing more than the car is worth for a longer period, so it's worth weighing lower payments against these tradeoffs.
Generally yes, since it reduces the loan amount, lowers both payments and total interest, and helps avoid being underwater on the loan in the early ownership period.
