Auto Loan Calculator
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.
Key Takeaways
- Put at least 20% down on a new car (10% on used) to avoid being underwater on your loan — owing more than the car is worth.
- A $30,000 loan at 6.5% costs $5,219 in interest over 5 years but only $3,101 over 3 years — choosing the 3-year term saves over $2,100 in interest.
- Get pre-approved through your bank or credit union before visiting the dealer — credit unions often offer rates 0.5-1% lower than dealer financing.
- Good auto loan rates in 2026 are 5.0-7.0% for excellent credit (740+) — used car rates are typically 1-2% higher.
- Don't forget sales tax (0-10%+ depending on state) — it gets added to your loan amount and increases both your payment and total interest.
How to Use This Calculator
- 1Enter the vehicle price and down payment — Input the sticker price (or negotiated price) and your down payment amount. Include any trade-in value to reduce the financed amount.
- 2Add sales tax and fees — Enter your state's sales tax rate (0–10%+) to see the true loan amount, since tax is typically rolled into the financing.
- 3Set the loan term and interest rate — Choose 36, 48, 60, or 72 months and enter the APR from your lender or pre-approval letter to calculate your monthly payment.
- 4Review payments and amortization — See your monthly payment, total interest paid, and the amortization schedule showing how each payment splits between principal and interest.
- 5Take action — Compare different term lengths and rates to find the sweet spot between affordable payments and minimal interest cost, then get pre-approved before visiting the dealer.
Auto Loan Guide: Smart Car Financing in 2026
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.
How Auto Loan Interest Works
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.
The 20/4/10 Rule for Car Buying
Financial experts recommend the 20/4/10 rule as a guardrail for affordable car financing:
- 20% down payment: A larger down payment reduces your loan amount, lowers monthly payments, and helps you avoid being underwater (owing more than the car is worth) due to depreciation.
- 4-year (48-month) maximum term: Shorter loans mean higher monthly payments but dramatically lower total interest. A 48-month loan at 7% on $30,000 costs $4,505 in interest vs. $5,642 on a 60-month loan — saving over $1,100.
- 10% of gross income for total car costs: Your monthly payment plus insurance, fuel, and maintenance should stay under 10% of gross monthly income to keep transportation affordable. Use our budget planner to see how a car payment fits into your overall finances.
How to Get the Best Auto Loan Rate
- Check your credit score first: Scores above 720 typically qualify for the best rates. If your score is below 680, consider spending a few months improving it before buying — even 1% lower APR saves hundreds to thousands.
- Get pre-approved from your bank or credit union: Credit unions often offer rates 1-2% lower than dealership financing. Pre-approval also gives you a firm offer to negotiate against.
- Compare at least 3-5 offers: Banks, credit unions, online lenders, and the dealership may all offer different rates. Multiple auto loan inquiries within 14 days count as a single credit pull.
- Negotiate on total vehicle price, not monthly payment: Dealers can make any payment seem affordable by extending the term. Focus on out-the-door price and total interest cost instead.
- Watch for dealer add-ons: Extended warranties, gap insurance, paint protection, and other add-ons are often overpriced at the dealership. Research independently before accepting.
Worked Example: $30,000 Loan at Different Terms
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 vs Used: The True Cost Comparison
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.
New Car ($48,000)
APR: 6.5%. 60-month payment: $939. Total interest: $8,315. Value after 3 years: ~$28,000. Net cost (payment + depreciation - equity): ~$28,315.
Used Car, 3 Years Old ($28,000)
APR: 8.0%. 48-month payment: $683. Total interest: $4,803. Value after 3 years: ~$16,000. Net cost: ~$16,803. Savings vs new: ~$11,500.
A certified pre-owned (CPO) vehicle often represents the best balance — competitive financing, manufacturer warranty, and 30-40% lower price than buying new.
Auto Loan Interest Rates by Credit Score (2026)
| 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.
How Our Auto Loan Calculator Works
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.
Related Tools
- Loan Comparison Calculator — Compare multiple auto loan offers side by side to find the best deal.
- Budget Planner — Make sure your car payment fits comfortably within your monthly budget.
- Credit Card Calculator — Evaluate whether paying off credit card debt first makes more sense than a larger down payment.
- Savings Calculator — Plan a savings goal for your down payment or future vehicle purchases.
Reviewed by Tahir Özcan · Founder, GetWealthCalc · Editorial standards
How We Calculate
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:
- Federal Reserve Auto Loan Data
- Kelley Blue Book
In-Depth Guide
Auto Loan Guide 2026: How to Get the Best Car Deal
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 GuideFrequently Asked Questions
How is my monthly car payment calculated?
Your 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.
What is a good interest rate for an auto loan in 2026?
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.
Should I choose a longer or shorter loan term?
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 $5,219 in interest over 5 years, but only $3,101 over 3 years — saving over $2,100. Choose the shortest term you can comfortably afford to minimize total cost.
How much should I put down on a car?
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.
Does sales tax apply to the full vehicle price?
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.
Is it better to finance through a dealer or a bank?
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.
What are typical auto loan interest rates in 2026?
In 2026, average auto loan rates vary by credit score: excellent credit (720+) qualifies for roughly 5.0–6.5% on new cars and 6.5–8.0% on used cars. Good credit (680–719) averages 6.5–8.5% new, 8.5–10.5% used. Fair credit (620–679) sees 10–14%. Poor credit (below 620) may face 15–20%+. Credit unions typically offer rates 0.5–1.5% lower than banks or dealers. On a $35,000 car loan over 60 months, the difference between 6% and 10% APR is about $3,800 in total interest — worth shopping aggressively.
How much should I put down on a car?
Financial advisors recommend at least 20% down on a new vehicle and 10% on used. A new $40,000 vehicle loses roughly 20% of its value in the first year and 50% by year 5. Without a down payment, you risk being "underwater" — owing more than the car is worth — which is problematic if you need to sell or if the car is totaled. A $8,000 down payment (20%) on a $40,000 car financed at 6.5% for 60 months saves about $1,560 in interest and ensures you have equity in the vehicle from day one.
Is a 72-month or 84-month auto loan a bad idea?
Long auto loan terms (72–84 months) lower monthly payments but significantly increase total interest paid and leave you underwater longer. A $35,000 loan at 7% for 84 months costs $9,372 in interest with $528/month payments. The same loan at 60 months costs $6,583 in interest ($693/month). You pay $2,789 extra for the longer term — and the vehicle may require expensive repairs before you finish paying it off. Stick to 48–60 months maximum for new vehicles, and aim for 36–48 months on used vehicles.
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Sources & methodology
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.
- BLS — Consumer Price Index(published )
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.
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Important Disclaimer
This calculator provides estimates for educational purposes only and does not constitute financial advice. Results are based on the inputs you provide and standard financial formulas. Actual outcomes may vary based on your individual circumstances, market conditions, and other factors. Always consult a certified financial planner before making major financial decisions. Read our full Financial Disclaimer.
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