This formula provides an estimate based on standard assumptions and may not reflect your exact loan terms. Actual payments can vary depending on lender calculations, fees, taxes, your credit profile, and how interest is applied.
Free auto loan calculator: Estimate your monthly car payments
Use this simple auto loan calculator to estimate your monthly car payments and see the cost of your vehicle over time. And, to make budgeting for a car easier, get a money management app that gives you a clear overview of your finances. Track spending, check your credit score, and simplify how you manage your money, all from one dashboard.
Estimate your monthly car loan payments
Use this auto loan calculator to estimate monthly car loan payments and total amount payable over the loan term. Start by entering the price of the car and the term and interest rate of your auto loan. The more precise you are, the more accurate your vehicle loan summary will be.
How to use this auto loan calculator
Just enter the vehicle’s price and your loan’s term and interest rate, and we’ll estimate your monthly car payments. You’ll also see the total cost of your car loan over time, including interest. Here is a quick explanation of the terms and variables used in this auto loan calculator.
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Inputs
These are the variables that influence how much you’ll pay for your car over time.
- Vehicle price: The total “ticket price” of the car before any discounts or payments.
- Down payment: The amount you pay upfront to reduce the size of your car loan.
- Trade-in value: The resale value of your current vehicle, applied toward the price of the new purchase.
- Sales tax: The tax charged on the vehicle, based on local rates.
- Fees: Add-ons and additional costs like registration, title, or dealer fees. These may be rolled into monthly payments when not paid upfront.
- Interest rate (APR%): The annual cost of borrowing money, expressed as a percentage.
- Loan term: How long it will take you to repay the loan, in years.
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Outputs
Here’s how to understand the results this auto loan calculator shows.
- Monthly payment: The estimated amount you’ll pay each month toward your car loan.
- Total loan cost: The estimated full amount you’ll pay over the life of the loan, including interest.
- Total interest paid: The total amount of interest you’ll pay over the full loan term.
- Principal paid: The portion of each payment that goes toward paying off the original loan amount (not interest).
- Balance: The remaining amount you owe on the loan at a given point in time.
- Equity over time: How much of the car you own as you pay down the loan, expressed as a percent.
- Amortization schedule: A detailed breakdown of each payment, showing principal and interest over time.
All outputs are estimated based on the data you provide. Your actual payments, balances, and interest may be different.
What is included in a car payment?
Your monthly car payment typically includes more than just the loan principal and interest. If you’re financing your car through a dealership, monthly payments might also include:
- Dealer fees: Charges like documentation, registration, or processing fees can be rolled into your loan. However, you may get the option to pay these fees upfront.
- Sales tax: The tax applied to the vehicle purchase may become part of your monthly payment. Where applicable, sales tax typically ranges from 2% to 7.5%, although some states have no sales tax at all. Like with dealer fees, you may be able to pay any sales tax up front.
- Add-ons: Optional products or services, like extended warranties, GAP insurance, and maintenance plans. These can increase your total loan size, if not paid for outright.
If you pay for your car privately, your monthly payments typically only reflect the loan amount and interest, as costs like taxes, fees, and add-ons are usually paid upfront instead of being rolled into the loan.
Just as importantly, some additional expenses associated with car ownership are not typically included in monthly auto loan payments (or this calculator). For example, you’ll typically need to factor auto insurance, gas/fuel, maintenance, and repairs into your budget separately.
How auto loan payments are calculated
Auto loan payments are typically calculated using a standard amortized loan formula. If you want to do the math yourself, plug your numbers into the formula shown below.
Standard amortized car loan formula
M = P [ r(1+r)^n ] / [ (1+r)^n – 1 ]
M |
Total monthly car payment: The estimated amount you’ll pay each month toward the loan, not including any monthly fees or add-ons. |
|---|---|
P |
Principal loan amount: The vehicle price minus your down payment and the trade-in value of your old car, plus taxes and fees if applicable. |
r |
Monthly interest rate: Lenders may provide an annual figure, in which case you’ll need to divide that by 12 for each month in the year. For example, if your interest rate is 6% per year, your monthly rate would be 0.5% (0.06 ÷ 12 (* 100)). |
n |
Number of payments: The total number of monthly payments, calculated as 12 x your loan term in years (since there are 12 months in a year). A 7-year car loan would have 84 payments. |
How to get a better auto loan rate
You may be able to snag a better auto loan rate by improving your credit score, increasing your down payment, shopping around different lenders, and getting financing preapproved.
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Improve your credit score
Improve your credit score to qualify for lower interest rates.
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Make a bigger down payment
A larger upfront payment reduces your loan amount.
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Save with a shorter loan term
Shorter terms often come with better rates and less total interest.
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Explore lenders
Compare offers from multiple lenders to find the best auto loan rate.
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Get preapproved
Preapproval for financing can strengthen your negotiating power at the dealership.
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Consider buying used
Used cars normally cost less, which can reduce how much you need to finance.
What increases your total loan cost?
Several factors can raise the total cost of your loan, even if your monthly payment looks manageable.
- Longer loan terms: Spreading payments over more months lowers your monthly bill. But, it increases the total interest you pay.
- Higher interest rates: Even a slightly higher interest rate can add hundreds or thousands of dollars over the life of the loan.
- Rolling in taxes and fees: If you choose not to pay sales tax, registration, and dealer fees up front, you increase the amount you’re financing — meaning more interest.
- Add-ons and extras: Extended warranties, service plans, and GAP insurance can all raise your loan balance.
- Low or no down payment: The less you pay up front, the more you pay monthly and in total interest.
How much of your car cost should you finance?
How much of your car cost you should finance depends on your unique situation. However, the 20/3/8 rule suggests financing 80% of the value, making a 20% down payment and leaving a remaining loan term of around three years with a monthly payment that’s 8% or less of your gross income.
That said, everyone’s financial situation is different. Take stock of what you can comfortably afford to pay each month, while minimizing interest costs. And be careful to avoid negative equity, where you owe more than the car is actually worth. This can happen if you roll over an existing loan, miss payments, or choose to finance a car you can’t really afford.
Budget for car payments the easy way
Adding car payments to your monthly budget can seem like a headache, but managing your personal finances doesn’t have to be. Install Norton Money to get a bird’s-eye view of your financial accounts, all from one dashboard. With a solid handle on your monthly costs and sources of income, you’ll have a clearer picture of your overall financial situation — helping you make a more informed auto loan decision.
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