Car Loan Calculator

How Much Will Your Car Payment Be?

After housing, a car payment is the second-largest monthly expense for most Americans. Getting the math right before you visit the dealership puts you in a stronger negotiating position and prevents the common trap of focusing on monthly payment instead of total cost.

Our car loan calculator shows your monthly payment, total interest paid, and total cost of the loan. Enter the vehicle price, down payment, trade-in value, interest rate, and loan term to see a complete breakdown. The calculator also generates an amortization schedule showing how your balance decreases over time.

Quick example: A $35,000 car with $5,000 down, financed at 6.5% for 60 months costs $587/month with $5,217 in total interest — making the true cost $40,217. Stretching to 72 months drops the payment to $502 but adds $1,130 in interest.

Current Auto Loan Rates (2026)

Auto loan rates depend on whether you're buying new or used, your credit score, and the loan term. In 2026, average rates for borrowers with good credit (700+) are approximately 5.5–6.5% for new cars and 7–8.5% for used cars. Excellent credit (750+) can qualify for rates 1–2% below these averages.

New car rates are lower because the vehicle serves as more valuable collateral — it's newer, more predictable in value, and easier for lenders to resell if you default. Manufacturer financing (offered through the brand's captive lender, like Ford Motor Credit or Toyota Financial) sometimes offers promotional rates of 0–2.9% on specific models, though these often require excellent credit and may not be combinable with rebates.

Used car rates are higher because used vehicles depreciate faster and carry more uncertainty about condition and remaining useful life. The age and mileage of the vehicle also matter — most lenders charge higher rates or won't finance vehicles older than 7–10 years.

Credit unions consistently offer the lowest auto loan rates — often 0.5–1.5% below banks and online lenders. If you're not a credit union member, many allow you to join with a small deposit. Checking your credit union's rate before visiting a dealer gives you a benchmark to negotiate against.

The True Cost of Longer Loan Terms

The auto industry has aggressively pushed loan terms longer — 72-month and 84-month loans now represent a significant share of auto financing. The appeal is obvious: lower monthly payments make more expensive vehicles feel affordable. The hidden cost is substantial.

On a $30,000 loan at 7%, here's how term length affects total cost. A 48-month term means $718/month payments with $4,485 in total interest. A 60-month term drops the payment to $594 but interest climbs to $5,644. A 72-month term brings payments to $510 but interest reaches $6,757. An 84-month term offers the lowest payment at $450 but the highest interest at $7,826.

The longer term costs $3,341 more in interest than the shorter one — and that's not the only problem. Negative equity (owing more than the car is worth) is a major risk with longer loans. A new car typically depreciates 20% in year one and 15% in year two. On a 72- or 84-month loan with a small down payment, you could be underwater for 3–4 years.

Being underwater matters if you need to sell the car, trade it in, or if it's totaled in an accident — your insurance payout covers market value, not your loan balance. GAP insurance covers this difference but adds another cost.

Down Payment Strategy

A larger down payment reduces your monthly payment, decreases total interest, and helps you avoid negative equity. The general recommendation is 20% down for a new car and 10% down for a used car. However, any down payment is better than none.

$0 down is possible — many lenders allow it — but it maximizes your interest cost, guarantees negative equity from day one, and may result in a higher interest rate. Zero-down deals are the riskiest auto financing structure for the buyer.

Trade-in value functions as a down payment. If your current car is worth $8,000, that's $8,000 off the new purchase price before financing. Get your trade-in appraised at multiple dealers and by Carvana, Vroom, or CarMax before negotiating — knowing your car's value prevents under-offers.

Cash rebates vs. low-rate financing: Manufacturers often offer a choice between a cash rebate ($2,000–$5,000 off the price) or a promotional interest rate (0–2.9%). Run both scenarios through the calculator — the better deal depends on the rebate size, the rate difference, and your loan term. For shorter loans, the rebate often wins. For longer terms, the low rate may save more.

Negotiating Your Auto Loan

Get pre-approved before visiting the dealer. Check rates at your bank, credit union, and online lenders like Capital One Auto, LightStream, or myAutoloan. Walk into the dealer knowing your approved rate. This forces the dealer's finance department to beat your rate or lose the financing (and their commission).

Negotiate the purchase price first, financing second. Dealers often manipulate numbers by asking “What monthly payment can you afford?” and then adjusting price, term, and rate to hit that target — sometimes extending your term or inflating the price to achieve the number. Negotiate the out-the-door price before discussing financing.

Watch for add-ons in the finance office. Extended warranties, paint protection, fabric protection, GAP insurance, and VIN etching are high-margin products pushed during the financing paperwork. Some are valuable (GAP insurance on a long-term, low-down-payment loan), most are overpriced at the dealer. If you want these products, buy them independently for less.

Check the fine print for prepayment penalties. Most auto loans don't have them, but verify. You want the flexibility to pay extra or refinance without fees.

When to Refinance Your Auto Loan

Auto loan refinancing replaces your existing loan with a new one at a lower rate, reducing your monthly payment and total interest. Consider refinancing if your credit score has improved since the original loan (even 30–50 points can lower your rate meaningfully), if market rates have dropped, or if you accepted a high dealer rate under pressure and now have time to shop.

The ideal refinancing window is within the first 2–3 years of your loan and while the car has fewer than 100,000 miles. Lenders are less willing to refinance older, high-mileage vehicles. The savings from refinancing should exceed any fees (application fees, title transfer fees) — typically $200–$500.

Refinancing a $20,000 balance from 8% to 5.5% with 36 months remaining saves approximately $800 in total interest and reduces the monthly payment by about $22/month. On larger balances or bigger rate drops, savings can exceed $2,000.