Auto Loan Calculator: Monthly Car Payment & Interest
Auto loan calculator for monthly car payments. Enter vehicle price, down payment, trade-in, APR, and term in months to see total interest and total cost.
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Auto Loan Calculator
An auto loan calculator works out the monthly payment on a car loan from the vehicle price, the down payment, any trade-in value, the interest rate, and the loan term. It also shows the amount financed, the total interest paid, and the total of all payments.
What the calculator does
Enter five numbers:
- Vehicle price: the agreed price of the car, from $1 to $10,000,000.
- Down payment: cash paid up front, from $0 to $10,000,000.
- Trade-in value: credit for the old car, from $0 to $10,000,000.
- Annual interest rate (APR): from 0% to 100%.
- Loan term: a whole number of months, from 1 to 120.
The calculator returns the monthly payment, the amount financed, the total interest paid, and the total of payments. A bar chart shows what share of that total goes to principal and what share goes to interest.
The down payment plus the trade-in must be less than the vehicle price. If they cover the whole price, there is nothing to borrow, and the calculator reports an error instead of a result.
How the amount financed is calculated
The amount financed is the part of the price that becomes the loan:
where P is the amount financed, V the vehicle price, D the down payment and T the trade-in value.
For a $30,000 car with $3,000 down and a $2,000 trade-in, the amount financed is $25,000. Only this amount accrues interest.
Auto loan payment formula
A fixed-rate car loan is repaid in equal monthly payments. Each payment covers the interest that built up on the remaining balance that month. The rest of the payment reduces the balance. The payment is sized so the balance reaches exactly zero on the last month:
- M is the monthly payment.
- P is the amount financed.
- r is the monthly interest rate: the annual rate divided by 12. At 6.5% per year, r is 0.065 ÷ 12, about 0.00542.
- n is the loan term in months.
The calculator divides the annual rate by 12 to get the monthly rate. This is the standard convention for loan quotes in the United States, and it matches how lenders state an APR on a loan disclosure. It is not the same as compounding an effective annual rate.
If the interest rate is 0%, the formula would divide by zero, so the payment is simply the amount financed divided by the number of months. An $18,000 loan at 0% for 36 months costs $500.00 per month and $0 in interest.
Worked example
A buyer finances a $30,000 car with $3,000 down and a $2,000 trade-in, at 6.5% APR for 60 months.
- Amount financed: $30,000 − $3,000 − $2,000 = $25,000.
- Monthly rate: 6.5% ÷ 12 ≈ 0.00542.
- Payment: 25,000 × [0.00542 × (1.00542)⁶⁰] / [(1.00542)⁶⁰ − 1] ≈ $489.15.
- Total of payments: $489.15 × 60 = $29,349.22.
- Total interest: $29,349.22 − $25,000 = $4,349.22.
In the breakdown bar, principal is 85.2% of the total of payments and interest is 14.8%. About $135 of the first payment is interest and about $354 reduces the balance. That split shifts toward principal every month, because interest is charged only on what is still owed.
How the loan term changes the cost
A longer term lowers the monthly payment but raises the total interest, because the balance is outstanding longer. For the same $25,000 financed at 6.5% APR:
| Term | Monthly payment | Total of payments | Total interest |
|---|---|---|---|
| 36 months | $766.23 | $27,584.10 | $2,584.10 |
| 48 months | $592.87 | $28,457.94 | $3,457.94 |
| 60 months | $489.15 | $29,349.22 | $4,349.22 |
| 72 months | $420.25 | $30,257.87 | $5,257.87 |
| 84 months | $371.24 | $31,183.82 | $6,183.82 |
Stretching this loan from 36 to 84 months cuts the payment by $394.99 but adds $3,599.72 in interest.
What "total of payments" means
The total of payments is the monthly payment multiplied by the number of months. This is the same definition United States lenders must use on a Truth in Lending disclosure, so the calculator's figure lines up with loan paperwork.
By this convention, the total covers only the borrowed amount. It does not include the down payment or the trade-in, because those are not part of the loan. In the example above, the buyer's total cash cost for the car is the $29,349.22 in payments plus the $3,000 down payment, or $32,349.22, along with giving up the $2,000 trade-in.
What the calculator does not include
The calculator models only the loan itself. It does not add sales tax, registration, title or documentation fees, or insurance. It also does not handle negative equity: if money is still owed on the trade-in, the trade-in value entered should be the car's value minus that debt, and only when the result is positive.
Frequently asked questions
What interest rate should be entered?
The annual percentage rate (APR) quoted by the lender. The calculator divides it by 12 to get the monthly rate. Rates from 0% to 100% are accepted.
Does a bigger down payment reduce the interest paid?
Yes. Every dollar of down payment or trade-in reduces the amount financed, and interest is charged only on the amount financed. In the 60-month example, raising the down payment from $3,000 to $5,000 drops the amount financed to $23,000 and shrinks both the payment and the total interest.
How is a 0% loan calculated?
At 0% the payment is the amount financed divided by the number of months. The total of payments equals the amount financed, and the total interest is $0.
Why is the total of payments less than what the car costs in full?
The total of payments counts only the loan: the monthly payment times the number of months. The down payment and the trade-in are paid outside the loan, so they are not in that figure.
What is the longest loan term the calculator accepts?
120 months (10 years). The term must be a whole number of months of at least 1.