Auto Loan Calculator (2024)

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Auto Loan Calculator (1)

  • Total Price
  • Monthly Payment

Monthly Pay: $754.85

Total Loan Amount$40,000.00
Sale Tax$5,250.00
Upfront Payment$18,050.00

Total of 60 Loan Payments

$45,290.96
Total Loan Interest$5,290.96
Total Cost (price, interest, tax, fees)$63,340.96


Find Average Tax Rate and Fees in Your State.

Amortization schedule

YearInterestPrincipalEnding Balance
1$1,835.98$7,222.21$32,777.79
2$1,466.48$7,591.71$25,186.08
3$1,078.07$7,980.12$17,205.96
4$669.80$8,388.40$8,817.56
5$240.63$8,817.56$0.00

RelatedCash Back or Low Interest Calculator | Auto Lease Calculator

The Auto Loan Calculator is mainly intended for car purchases within the U.S. People outside the U.S. may still use the calculator, but please adjust accordingly. If only the monthly payment for any auto loan is given, use the Monthly Payments tab (reverse auto loan) to calculate the actual vehicle purchase price and other auto loan information.

Auto Loans

Most people turn to auto loans during a vehicle purchase. They work as any generic, secured loan from a financial institution does with a typical term of 36, 60, 72, or 84 months in the U.S. Each month, repayment of principal and interest must be made from borrowers to auto loan lenders. Money borrowed from a lender that isn't paid back can result in the car being legally repossessed.

Dealership Financing vs. Direct Lending

Generally, there are two main financing options available when it comes to auto loans: direct lending or dealership financing. The former comes in the form of a typical loan originating from a bank, credit union, or financial institution. Once a contract has been entered with a car dealer to buy a vehicle, the loan is used from the direct lender to pay for the new car. Dealership financing is somewhat similar except that the auto loan, and thus paperwork, is initiated and completed through the dealership instead. Auto loans via dealers are usually serviced by captive lenders that are often associated with each car make. The contract is retained by the dealer but is often sold to a bank, or other financial institution called an assignee that ultimately services the loan.

Direct lending provides more leverage for buyers to walk into a car dealer with most of the financing done on their terms, as it places further stress on the car dealer to compete with a better rate. Getting pre-approved doesn't tie car buyers down to any one dealership, and their propensity to simply walk away is much higher. With dealer financing, the potential car buyer has fewer choices when it comes to interest rate shopping, though it's there for convenience for anyone who doesn't want to spend time shopping or cannot get an auto loan through direct lending.

Often, to promote auto sales, car manufacturers offer good financing deals via dealers. Consumers in the market for a new car should start their search for financing with car manufacturers. It is not rare to get low interest rates like 0%, 0.9%, 1.9%, or 2.9% from car manufacturers.

Vehicle Rebates

Car manufacturers may offer vehicle rebates to further incentivize buyers. Depending on the state, the rebate may or may not be taxed accordingly. For example, purchasing a vehicle at $50,000 with a cash rebate of $2,000 will have sales tax calculated based on the original price of $50,000, not $48,000. Luckily, a good portion of states do not do this and don't tax cash rebates. They are Alaska, Arizona, Delaware, Iowa, Kansas, Kentucky, Louisiana, Massachusetts, Minnesota, Missouri, Montana, Nebraska, New Hampshire, Oklahoma, Oregon, Pennsylvania, Rhode Island, Texas, Utah, Vermont, and Wyoming.

Generally, rebates are only offered for new cars. While some used car dealers do offer cash rebates, this is rare due to the difficulty involved in determining the true value of the vehicle.

Fees

A car purchase comes with costs other than the purchase price, the majority of which are fees that can normally be rolled into the financing of the auto loan or paid upfront. However, car buyers with low credit scores might be forced into paying fees upfront. The following is a list of common fees associated with car purchases in the U.S.

  • Sales Tax—Most states in the U.S. collect sales tax for auto purchases. It is possible to finance the cost of sales tax with the price of the car, depending on the state the car was purchased in. Alaska, Delaware, Montana, New Hampshire, and Oregon are the five states that don't charge sales tax.
  • Document Fees—This is a fee collected by the dealer for processing documents like title and registration.
  • Title and Registration Fees—This is the fee collected by states for vehicle title and registration.
  • Advertising Fees—This is a fee that the regional dealer pays for promoting the manufacturer's automobile in the dealer's area. If not charged separately, advertising fees are included in the auto price. A typical price tag for this fee is a few hundred dollars.
  • Destination Fee—This is a fee that covers the shipment of the vehicle from the plant to the dealer's office. This fee is usually between $900 and $1,500.
  • Insurance—In the U.S., auto insurance is strictly mandatory to be regarded as a legal driver on public roads and is usually required before dealers can process paperwork. When a car is purchased via loan and not cash, full coverage insurance is often mandatory. Auto insurance can possibly run more than $1,000 a year for full coverage. Most auto dealers can provide short-term (1 or 2 months) insurance for paperwork processing so new car owners can deal with proper insurance later.

If the fees are bundled into the auto loan, remember to check the box 'Include All Fees in Loan' in the calculator. If they are paid upfront instead, leave it unchecked. Should an auto dealer package any mysterious special charges into a car purchase, it would be wise to demand justification and thorough explanations for their inclusion.

Auto Loan Strategies

Preparation

Probably the most important strategy to get a great auto loan is to be well-prepared. This means determining what is affordable before heading to a dealership first. Knowing what kind of vehicle is desired will make it easier to research and find the best deals to suit your individual needs. Once a particular make and model is chosen, it is generally useful to have some typical going rates in mind to enable effective negotiations with a car salesman. This includes talking to more than one lender and getting quotes from several different places. Car dealers, like many businesses, want to make as much money as possible from a sale, but often, given enough negotiation, are willing to sell a car for significantly less than the price they initially offer. Getting a preapproval for an auto loan through direct lending can aid negotiations.

Credit

Credit, and to a lesser extent, income, generally determines approval for auto loans, whether through dealership financing or direct lending. In addition, borrowers with excellent credit will most likely receive lower interest rates, which will result in paying less for a car overall. Borrowers can improve their chances to negotiate the best deals by taking steps towards achieving better credit scores before taking out a loan to purchase a car.

Cash Back vs. Low Interest

When purchasing a vehicle, many times, auto manufacturers may offer either a cash vehicle rebate or a lower interest rate. A cash rebate instantly reduces the purchasing price of the car, but a lower rate can potentially result in savings in interest payments. The choice between the two will be different for everyone. For more information about or to do calculations involving this decision, please go to the Cash Back vs. Low Interest Calculator.

Early Payoff

Paying off an auto loan earlier than usual not only shortens the length of the loan but can also result in interest savings. However, some lenders have an early payoff penalty or terms restricting early payoff. It is important to examine the details carefully before signing an auto loan contract.

Consider Other Options

Although the allure of a new car can be strong, buying a pre-owned car even if only a few years removed from new can usually result in significant savings; new cars depreciate as soon as they are driven off the lot, sometimes by more than 10% of their values; this is called off-the-lot depreciation, and is an alternative option for prospective car buyers to consider.

People who just want a new car for the enjoyment of driving a new car may also consider a lease, which is, in essence, a long-term rental that normally costs less upfront than a full purchase. For more information about or to do calculations involving auto leases, please visit the Auto Lease Calculator.

In some cases, a car might not even be needed! If possible, consider public transportation, carpool with other people, bike, or walk instead.

Buying a Car with Cash Instead

Although most car purchases are made with auto loans in the U.S., there are benefits to buying a car outright with cash.

  • Avoid Monthly Payments—Paying with cash relinquishes a person of the responsibility of making monthly payments. This can be a huge emotional benefit for anyone who would prefer not to have a large loan looming over their head for the next few years. In addition, the possibility of late fees for late monthly payments no longer exists.
  • Avoid Interest—No financing involved in the purchase of a car means there will be no interest charged, which will result in a lower overall cost to own the car. As a very simple example, borrowing $32,000 for five years at 6% will require a payment of $618.65 per month, with a total interest payment of $5,118.98 over the life of the loan. In this scenario, paying in cash will save $5,118.98.
  • Future Flexibility—Because ownership of a car is 100% after paying in full. There aren't any restrictions on the car, such as the right to sell it after several months, use less expensive insurance coverage, and make certain modifications to the car.
  • Avoid Overbuying—Paying in full with a single amount will limit car buyers to what is within their immediate, calculated budget. On the other hand, financed purchases are less concrete and have the potential to result in car buyers buying more than what they can afford long term; it's easy to be tempted to add a few extra dollars to a monthly payment to stretch the loan length out for a more expensive car. To complicate matters, car salesmen tend to use tactics such as fees and intricate financing in order to get buyers to buy out of their realm. All of this can be avoided by paying in cash.
  • Discounts—In some cases, car purchases can come with the option of either an immediate rebate or low-interest financing. Certain rebates are only offered to cash purchases.
  • Avoid Underwater Loan—When it comes to financing a depreciating asset, there is the chance that the loan goes underwater, which means more is owed on the asset than its current worth. Auto loans are no different, and paying in full avoids this scenario completely.

There are a lot of benefits to paying with cash for a car purchase, but that doesn't mean everyone should do it. Situations exist where financing with an auto loan can make more sense to a car buyer, even if they have enough saved funds to purchase the car in a single payment. For example, if a very low interest rate auto loan is offered on a car purchase and there exist other opportunities to make greater investments with the funds, it might be more worthwhile to invest the money instead to receive a higher return. Also, a car buyer striving to achieve a higher credit score can choose the financing option, and never miss a single monthly payment on their new car in order to build their scores, which aid other areas of personal finance. It is up to each individual to determine which the right decision is.

Trade-in Value

A trade-in is a process of selling your vehicle to the dealership in exchange for credit toward purchasing another vehicle. Don't expect too much value when trading in old cars to dealerships. Selling old cars privately and using the funds for a future car purchase tends to result in a more financially desirable outcome.

In most of the states that collect sales tax on auto purchases (not all do), the sales tax collected is based on the difference between the new car and trade-in price. For a $50,000 new car purchase with a $10,000 trade-in value, the tax paid on the new purchase with an 8% tax rate is:

($50,000 - $10,000) × 8% = $3,200

Some states do not offer any sales tax reduction with trade-ins, including California, District of Columbia, Hawaii, Kentucky, Maryland, Michigan, Montana, and Virginia. This Auto Loan Calculator automatically adjusts the method used to calculate sales tax involving Trade-in Value based on the state provided.

Using the values from the example above, if the new car was purchased in a state without a sales tax reduction for trade-ins, the sales tax would be:

$50,000 × 8% = $4,000

This comes out to be an $800 difference which could be a reason for people selling a car in these states to consider a private sale.

Auto Loan Calculator (2024)

FAQs

Are auto loan calculators accurate? ›

Calculators Only Provide Estimates

Because they are dependent on the accuracy of the information you enter, they may be different than what a dealership will really offer you. The best use for these calculators is in helping you compare cars.

How much is a $30000 car loan for 60 months? ›

How much would a $30,000 car cost per month? This all depends on the sales tax, the down payment, the interest rate and the length of the loan. But just as a ballpark estimate, assuming $3,000 down, an interest rate of 5.8% and a 60-month loan, the monthly payment would be about $520.

How do I figure out how much my car loan will be? ›

How do I calculate my auto loan?
  1. Calculate the amount you need to finance your car.
  2. Find the annual interest rate offered by your bank on auto loans.
  3. Decide on the loan term (typically 1-5 years).
  4. Divide the loan amount by your loan term, multiply the result by the annual interest and multiply that by the loan term.
7 days ago

How much is a $40,000 car loan payment for 84 months? ›

For example, a car buyer considering a $40,000 new car loan with an 84-month term at 9% APR would have a monthly car payment of about $623 and pay $12,369 in interest over the seven-year loan.

What FICO score do most auto lenders use? ›

The base FICO score is also called FICO Score 8 or 9. It's not designed specifically for auto loans, but many lenders use it. It's a number between 300 and 850, and a higher score means that a person is more likely to make loan payments on time.

What score do most auto lenders use? ›

The two big credit scoring models used by auto lenders are FICO® Auto Score and Vantage. We're going to take at look at FICO® since it has long been the auto industry standard. What is a FICO credit score? FICO is an acronym that stands for: Fair Isaac Corporation, the company that developed the FICO® credit scoring.

What credit score do you need to get a $30000 car loan? ›

The credit score required and other eligibility factors for buying a car vary by lender and loan terms. Still, you typically need a good credit score of 661 or higher to qualify for an auto loan. About 69% of retail vehicle financing is for borrowers with credit scores of 661 or higher, according to Experian.

How much to afford a $60,000 car? ›

Assuming a 60-month loan with a 4% interest rate, your monthly car payment would be around $1,073.33. To afford this, you would need to have a gross income of at least $53,666.67 per year. Unless you use a different financing method like a Savings Club.

How much is the average car payment for a $60000 car? ›

The Total Loan Amount

The total amount of money you borrow determines what you'll pay per month. For example, if you're buying a $60,000 luxury car at 3% APR with no money down and paying it off over five years, you'll be responsible for paying about $1,078 per month.

Who has the lowest auto loan rates? ›

Compare Car Loan Rates
Top Auto Loan LenderLowest APROur Award
AutoPay4.67%**Best Auto Loan Rates
PenFed Credit Union5.24%Best Credit Union Auto Loan
Auto Approve5.24%**Best Auto Refinance Rates
Consumers Credit Union6.54%Excellent Credit Union Auto Loan
3 more rows

How much is a $30,000 car payment for 5 years? ›

Provided the down payment is $5,000, the interest rate is 10%, and the loan length is five years, the monthly payment will be $531.18/month. With a $1,000 down payment and an interest rate of 20% with a five year loan, your monthly payment will be $768.32/month.

What is a good interest rate for a car for 72 months? ›

An interest rate under 5% is a great rate for a 72-month auto loan. However, the best loan offers are only available to borrowers who have the best credit scores and payment histories.

How much is a $25,000 car payment for 72 months? ›

Example: A six year fixed-rate loan for a $25,000 new car, with 20% down, requires a $20,000 loan. Based on a simple interest rate of 3.4% and a loan fee of $200, this loan would have 72 monthly payments of $310.54 each and an annual percentage rate (APR) of 3.74%.

How much is a 5 year car payment on $40,000? ›

If you take a loan for five years and your interest rate is 4%, your monthly payment for a $40,000 loan will be $737. Remember that the longer the loan period, the more money you will overpay to the bank.

How much is a 20k car payment for 72 months? ›

If you choose a loan term of 72 months, your monthly payment drops to $316, and a 60-month loan term will be $377. A car loan with a low-interest rate could leave you with monthly payments that are higher than you can afford.

How accurate is loan simulator? ›

Keep in mind, this tool can't predict your future payments with 100% accuracy. In order to make these predictions, Loan Simulator makes several assumptions as it calculates monthly repayment amounts. Important: Results of Loan Simulator are for informational purposes only and should not be considered financial advice.

Are personal loan calculators accurate? ›

While you use a personal loan calculator, you need not wonder if you would get accurate results. A personal loan calculator gives error-free and accurate results every time. You need not do manual calculations or spend hours finding your EMI when you have a personal loan calculator.

How do I know if my calculator is accurate? ›

So, to determine if a calculator is accurate, you simply need to know the true value of a calculation, then compare that to the answer of the same calculation that the calculator makes . Put simply, we all know that the true answer to 2+2 is equal to 4.

What would payments be on a $20,000 car loan? ›

For instance, using our loan calculator, if you buy a $20,000 vehicle at 5% APR for 60 months the monthly payment would be $377.42 and you would pay $2,645.48 in interest.

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