Calculate your monthly car payment, total interest cost, and see a complete amortization schedule. Factor in down payment, trade-in value, and sales tax for an accurate picture of your auto financing.
A vehicle is often the second-largest purchase most people make, and financing terms can dramatically affect the total cost. In 2026, the average new car price sits around$48,000 and the average used car around $27,000. With auto loan rates averaging 6.8% for new and 10.5% for used vehicles, understanding your financing options before visiting the dealership is essential. The CFPB's auto loans guide is a helpful starting point.
Auto loans use simple interest calculated on the declining principal balance. Each monthly payment covers that month's accrued interest first, with the remainder reducing your principal. Early in the loan, a larger share goes to interest; as the balance shrinks, more goes to principal. This is why making extra payments early in the loan term saves the most money — you reduce the balance that future interest is calculated on.
For example, on a $30,000 loan at 7% for 60 months, your first payment of $594 includes $175 in interest and $419 in principal. By payment 48, only $42 is interest and $552 goes to principal. Over the full loan, you pay $5,618 in total interest.
Financial experts recommend the 20/4/10 rule as a guardrail for affordable car financing:
The loan term you choose has a dramatic impact on total cost. Here is the same $30,000 loan at 6.5% APR across three common term lengths:
| Term | Monthly Payment | Total Interest | Total Cost |
|---|---|---|---|
| 36 months | $919 | $3,075 | $33,075 |
| 48 months | $712 | $4,201 | $34,201 |
| 60 months | $587 | $5,197 | $35,197 |
| 72 months | $505 | $6,363 | $36,363 |
The 72-month loan's $505 payment looks appealing, but you pay $3,288 more in interest than the 36-month term — and the car will have depreciated below your loan balance for much of the term, leaving you “underwater.”
New cars depreciate roughly 20% in the first year and 15% per year for the next four years. A $48,000 new car may be worth just $28,000 after three years. However, new cars qualify for lower interest rates and manufacturer incentives. Used cars (2-3 years old) avoid the steepest depreciation but carry higher APRs.
A certified pre-owned (CPO) vehicle often represents the best balance — competitive financing, manufacturer warranty, and 30-40% lower price than buying new.
| Credit Score | New Car APR | Used Car APR | Monthly Payment ($30K/60mo) |
|---|---|---|---|
| 781+ (Super Prime) | 5.0% | 6.5% | $566 |
| 661-780 (Prime) | 6.5% | 8.5% | $587 |
| 601-660 (Near Prime) | 9.5% | 12.0% | $630 |
| 501-600 (Subprime) | 13.0% | 17.0% | $681 |
Source: Experian State of the Automotive Finance Market, adjusted for 2026 rate environment. Improving your score from 660 to 740 can save $2,500+ in interest on a $30,000 loan.
Enter the vehicle price, down payment, trade-in value, sales tax rate, interest rate, and loan term. The calculator computes your monthly payment using standard amortization, then shows total interest paid, total cost of the loan, and a month-by-month amortization schedule. Adjust any input to instantly see how changes affect your payment and total cost. If you are trading in a vehicle that still has a loan balance, our debt payoff calculator can help you understand your remaining obligation.
Reviewed by Tahir Özcan · Founder, WealthCalc · Editorial policy
Monthly payment uses standard amortization formula. Total cost includes principal, interest, and optional trade-in/down payment adjustments. Amortization schedule shows principal vs. interest split.
Data Sources:
4 In-Depth Guides
Navigate car buying in 2026 with confidence. Understand auto loan rates, optimal loan terms, negotiation tactics, and how to calculate your true monthly cost.
Read Full GuideCompare the true costs of financing, leasing, and buying a car with cash in 2026. Includes real numbers, tax implications, and a decision framework for every budget.
Read Full GuideStep-by-step car negotiation strategies including dealer invoice pricing, timing tactics, trade-in optimization, and financing tips for 2026.
Read Full GuideCompare the full financial impact of buying new vs used including depreciation, loan rates, insurance, maintenance, and total cost of ownership over 5–10 years.
Read Full GuideYour monthly car payment is calculated using the standard amortization formula. It takes the total loan amount (vehicle price + sales tax - down payment - trade-in value), the annual interest rate (converted to a monthly rate), and the loan term in months. For example, a $30,000 loan at 6.5% APR for 60 months results in approximately $587 per month.
As of 2026, good auto loan rates for new cars are typically 5.0-7.0% for borrowers with excellent credit (740+). Used car rates are generally 1-2% higher. Your actual rate depends on your credit score, loan term, vehicle age, and lender. Credit unions often offer rates 0.5-1% lower than banks or dealer financing.
Shorter loan terms (36-48 months) have higher monthly payments but save you significantly on total interest. A $30,000 loan at 6.5% costs $7,197 in interest over 5 years, but only $4,201 over 3 years — saving you nearly $3,000. Choose the shortest term you can comfortably afford to minimize total cost.
Financial experts recommend at least 20% down on a new car and 10% on a used car to avoid being "underwater" (owing more than the car is worth). A larger down payment reduces your loan amount, monthly payment, total interest, and the risk of negative equity. If possible, combine a down payment with a trade-in to minimize your financing needs.
In most US states, sales tax applies to the full purchase price of the vehicle (some states subtract the trade-in value before calculating tax). Sales tax rates vary by state, typically ranging from 0% (Oregon, Montana) to over 10% (some California counties). Our calculator applies sales tax to the vehicle price and adds it to your loan amount.
It depends. Dealers sometimes offer promotional 0% or low-rate financing on new vehicles, which can be the best deal. However, for most purchases, getting pre-approved through your bank or credit union before visiting the dealer gives you negotiating power and often results in a better rate. Always compare at least 3 financing offers.
Get a complete picture of your finances by combining this tool with our other free calculators and in-depth guides.
Last reviewed:
Monthly payment uses standard amortization formula. Total cost includes principal, interest, and optional trade-in/down payment adjustments. Amortization schedule shows principal vs. interest split.
Figures are updated whenever the IRS, SSA, CMS, FHFA, HHS, or BLS publishes a new inflation adjustment or statutory change. This tool is for educational purposes only and does not constitute tax, legal, or investment advice. Consult a qualified professional for decisions affecting your personal finances.
Enjoy our free tools?
Help us keep WealthCalc free and ad-light for everyone.
Important Disclaimer
Related Tools
Get a complete picture of your finances with these related free calculators.
Compare two loan offers side by side. See monthly payments, total interest, total cost, and which option saves you more money.
Calculate your monthly mortgage payment including taxes, insurance, and PMI. View detailed amortization schedules.
Create your monthly budget with income vs. expense tracking using the 50/30/20 rule. Identify spending leaks and find money to save.
Escape the minimum payment trap. See how long it takes to pay off your credit card and how much you save by paying more each month.
Calculate your net paycheck after federal taxes, Social Security, Medicare, and deductions. See exactly what you take home per pay period.
Find the fastest way to become debt-free. Compare avalanche vs snowball strategies and see your personalized payoff timeline.