Auto Loan Calculator – Calculate Real Monthly Costs
Buying a car? Don't get trapped by the monthly payment pitch. accurately estimate your auto loan, including Tax, Title, and Trade-In values.
Car Details
Estimated Monthly Payment
For 60 months
Loan Details
The sticker price is just the beginning. The Out-the-Door (OTD) Price—which includes state sales tax, documentation fees, and dealer add-ons—is what actually determines your loan.
This Auto Loan Calculator allows you to reverse-engineer dealer financing. By inputting your trade-in value and down payment, you can see exactly how loan terms (48 vs 72 months) impact your total wealth, not just your monthly cash flow.
The Depreciation Reality
Cars are depreciating assets. A 72-month loan usually means you will owe more than the car is worth for the first 3-4 years. Our amortization schedule highlights this risk zone.
Smart Financing
Use the "Total Interest" output to compare offers. Sometimes a lower interest rate with a higher "Fee" (hidden in the car price) is actually worse. Always optimize for Total Cost.
Anatomy of a Car Deal
When you negotiate at a dealership, you are essentially fighting a war on four fronts. This is often called the "Four Square" method, and dealers move numbers between these boxes to confuse buyers.
The "Out-the-Door" (OTD) Strategy
The most powerful phrase you can use at a dealership is: "I want the Out-the-Door price."
Dealers often advertise a low price but then add "Reconditioning Fees," "Nitrogen Tire Fill," "Paint Protection," and "Doc Fees." The OTD price forces them to reveal all these hidden costs. When using this calculator, try to estimate the OTD price (Price + Tax + Fees) as your "Vehicle Price" input for the most accurate result.
Insider Strategies: Beyond the Calculator
The "20/4/10" Rule of Thumb
To avoid becoming "car poor," financial experts recommend this golden rule for auto financing:
- 20% Down Payment:This prevents you from being "underwater" (owing more than the car is worth) as soon as you drive off the lot.
- 4-Year Term (48 Months):If you can't afford the payment on a 4-year loan, you can't afford the car. Stretching to 6 or 7 years builds massive interest costs.
- 10% of Income:Your total transportation costs (loan + insurance + gas) should not exceed 10% of your gross monthly income.
The Math: How Car Payments Are Calculated
Auto loans use the Simple Interest Amortization formula. This is standard for closed-end installment loans.
Where P is the monthly payment, Pv is the loan amount (Present Value), R is the monthly interest rate (APR / 12), and n is the loan term in months.
Our calculator instantly adjusts Pv based on variables like Sales Tax, Down Payment, and Trade-In Equity to give you a precise "to the penny" estimate.
Scenario Comparison: The Cost of Long Terms
Comparing a $35,000 Auto Loan at 7% APR.
| Loan Term | Monthly Payment | Total Interest Paid | Verdict |
|---|---|---|---|
| 36 Months | $1,080 | $3,900 | Lowest Cost (Best Wealth) |
| 60 Months | $693 | $6,600 | Standard Trade-off |
| 84 Months | $529 | $9,400 | Dangerous (Negative Equity Risk) |
Related Tools
Is 0% APR financing actually free money?
Rarely. Manufacturers often offer '0% APR' OR 'Cash Rebates' (e.g., $2,000 back), but not both. If you take the 0% rate, you usually pay the full sticker price. Often, taking the rebate and arranging your own financing at a low rate results in a lower total cost.
What is 'Negative Equity' or being 'Upside Down'?
This happens when you owe more on the car loan than the vehicle is actually worth. New cars depreciate ~20% the moment you drive them off the lot. If you put $0 down, you are immediately upside down. If you total the car, insurance pays the value, not the loan balance, leaving you to pay the difference.
Should I focus on the monthly payment or the total price?
Always focus on the **Out-the-Door Price**. Dealers love to ask, 'What monthly payment do you want?' They can then stretch the loan term to 72 or 84 months to hit your payment target while secretly raising the car's price or interest rate, costing you thousands more in the long run.
How does my credit score affect my auto loan rate?
Significantly. A 'Super Prime' borrower (781+) might see rates around 5-6%, while a 'Subprime' borrower (501-600) could face rates of 12-18% or higher. On a $30,000 loan, this difference can equal over $5,000 in extra interest payments.
What are 'Doc Fees' and are they negotiable?
Documentation Fees cover the dealer's back-office paperwork. Some states cap them (e.g., $75 in NY), while others like FL or VA have no caps, often exceeding $800. While the fee itself might be 'policy,' you can often negotiate the vehicle price down by an equal amount to offset it.
Auto Finance Glossary
APR vs Interest Rate
The Interest Rate is what you pay to borrow the principal. The APR includes the interest rate PLUS lender fees, giving you the true cost of the loan.
Gap Insurance
An optional policy that pays the difference between what you owe and the car's cash value if it's totaled. Critical for low down payment loans.
Pre-Approval
A conditional commitment from a bank for an exact loan amount and interest rate. Always get this before visiting a dealership.
Upside Down / Negative Equity
When your loan balance is higher than the car's resale value. This traps you in the vehicle until the difference is paid off.
About This Calculator
This Auto Loan Calculator uses industry-standard algorithms to determine payments. It accounts for local sales tax and handles complex trade-in logic (tax credit on trade-in value where applicable). It is designed to empower consumers with unbiased data before they enter the high-pressure environment of an auto dealership.