Auto Loan Calculator
Calculate your monthly car payment, total interest, and view amortization schedule. Get AI-powered recommendations for auto financing optimization.
Auto Loan Calculator
Calculate your monthly car payment including principal, interest, taxes, and fees
Credit Score Impact
Credit scores 720+ qualify for best rates. Scores below 600 may face 10-15% rates or require co-signers.
Depreciation
New cars lose 20-30% value in year 1, 60% by year 5. Consider certified pre-owned for better value retention.
Total Cost
Beyond loan payments, budget for insurance, maintenance, fuel, and registration fees in ownership costs.
Auto Loan & Financing Guide
Interest Rate Factors
Auto loan rates depend on credit score, loan term, new vs used, and down payment amount.
- • Excellent credit (720+): 4-6% APR
- • Good credit (680-719): 6-9% APR
- • Fair credit (620-679): 9-13% APR
- • Poor credit (<620): 13-20% APR
Depreciation Impact
Cars lose value rapidly, affecting your equity and refinancing options.
- • Year 1: 20-30% depreciation
- • Year 2: Additional 15-20%
- • Year 5: 60-70% total depreciation
- • Certified pre-owned slower decline
Financing Tips
Smart strategies to get the best auto loan terms and rates.
- • Get pre-approved before shopping
- • Compare bank, credit union, dealer rates
- • Consider manufacturer incentives
- • Aim for loan term ≤ 5 years
Auto Loan Best Practices
✅ Do This
- •Get pre-approved to know your budget and negotiate from a position of strength
- •Shop rates at banks, credit unions, and online lenders before visiting dealers
- •Consider certified pre-owned vehicles for better value and slower depreciation
- •Aim for loan terms of 4-5 years maximum to minimize total interest
- •Put down 10-20% to reduce loan amount and avoid negative equity
❌ Avoid This
- •Don't focus only on monthly payment - consider total cost and loan terms
- •Avoid loan terms longer than 6 years - you'll pay excessive interest
- •Don't roll negative equity from trade-in into new loan
- •Avoid dealer add-ons like extended warranties without research
- •Don't accept first rate offered - always negotiate and compare
Auto Loan Calculator FAQ
How is auto loan monthly payment calculated?
Auto loan monthly payment is calculated using the standard amortization formula: M = P[r(1+r)^n]/[(1+r)^n-1], where P is the loan amount (car price + taxes + fees - down payment - trade-in), r is the monthly interest rate (annual APR ÷ 12), and n is the total number of monthly payments.
What affects auto loan interest rates?
Auto loan rates are affected by credit score (most important factor), loan term length, new vs used car, down payment amount, debt-to-income ratio, and current market rates. Credit scores above 720 typically qualify for the best available rates from lenders.
Should I finance through dealer or bank?
Compare rates from banks, credit unions, and dealers before deciding. Credit unions often offer the lowest rates for qualified members. Dealer financing may include manufacturer incentives (0% APR, cash back) that can offset higher rates. Always negotiate the car price separately from financing.
How much should I put down on a car loan?
Aim for 10-20% down payment to reduce loan amount and monthly payments. For new cars, 20% down helps offset first-year depreciation and prevents being "underwater" on the loan. Higher down payments also often qualify for better interest rates.
What loan term should I choose for auto financing?
Choose the shortest loan term you can comfortably afford. While longer terms (6-8 years) reduce monthly payments, they result in much higher total interest costs and increase the risk of owing more than the car is worth. 3-5 year terms offer the best balance of affordability and total cost.