Auto Loan Calculator

Auto loan payments are calculated using the standard amortization formula: M = P × [r(1+r)^n] / [(1+r)^n − 1], where P is the loan amount (vehicle price minus down payment), r is the monthly interest rate (APR / 12), and n is the total number of monthly payments. This ensures the loan is paid off completely by the end of the term.

Auto loan interest rates typically range from 3% to 10% depending on your credit score, loan term, and whether the vehicle is new or used. As of 2026, average rates are approximately 6–7% for new cars with good credit, and 8–12% for used cars. Credit scores above 700 generally qualify for the best rates.

A down payment reduces your loan amount dollar-for-dollar and lowers your monthly payment and total interest paid. For example, on a $30,000 vehicle with a $5,000 down payment, you only finance $25,000. A 20% down payment is recommended to avoid being underwater on your loan and may help you qualify for better interest rates.

Paying extra on your auto loan can save hundreds or thousands in interest and help you own your vehicle sooner. Extra payments go directly to principal, reducing the balance that accrues interest. However, ensure your loan has no prepayment penalties and that you have adequate emergency savings before making extra payments.

Negative equity (being “upside down”) means you owe more on your car loan than the vehicle is worth. For example, if your car is worth $12,000 but you owe $15,000, you have $3,000 in negative equity. This commonly happens because cars depreciate faster than loan balances decrease, especially with long loan terms or small down payments.

Trade-ins are more convenient and may provide tax benefits (sales tax only on the price difference), but private sales typically yield 10–20% more value. Choose trade-in for convenience, older or less desirable vehicles, or if you have negative equity. Choose private sale for popular vehicles where the extra value is worth the effort of listing, showing, and negotiating.