Auto Loan Calculator
Calculate monthly car payment, total interest, and total cost for any vehicle, down payment, trade-in, and APR.
Auto Loan Basics
Auto loans are typically simple interest loans -- interest is calculated on the current outstanding balance each month. Unlike mortgages, most auto loans have no prepayment penalties, so paying extra principal is always beneficial. A $500 extra payment early in a 60-month loan saves significantly more than the same payment later.
Avoiding the 84-Month Trap
84-month (7-year) car loans have become common, with lower monthly payments. The problem: cars depreciate faster than you pay down the loan, leaving you underwater for years. Interest costs on a 7-year loan are dramatically higher. Financial advisors recommend 48-60 months maximum for used cars and 60 months for new cars.
Total Cost vs Monthly Payment
Dealers focus on monthly payment to obscure total cost. A $400/month payment sounds manageable, but on a 72-month loan at 8%, you might pay $11,000+ in interest alone. Always calculate total cost before agreeing to financing terms, and shop your rate separately from the vehicle price negotiation.