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Free Auto Loan Tool

Car Loan Calculator

Calculate your monthly auto loan payment, total interest paid, and true cost of the vehicle — instantly. Adjust down payment, trade-in, and term to compare options.

Loan Details

$
$
$
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Monthly Payment

Estimated Monthly Payment

$601.14

60 months · 7.50% APR

💬 In Plain English

The car costs $35,000. After your down payment and trade-in ($5,000), you're borrowing $30,000. You'll pay $601.14 every month for 60 months. All in, this car ends up costing you $41,068 — that's $6,068 more than the sticker price, just for the option of paying over time instead of all at once.

Vehicle Price$35,000
Down + Trade-in− $5,000
Loan Amount$30,000
Total Interest Paid$6,068
Total Amount Paid$36,068
True Vehicle Cost$41,068
● Principal 83%● Interest 17%

Estimate only. Does not include sales tax, title fees, dealer fees, GAP insurance, or extended warranties. Actual rate depends on credit score, lender, and market conditions.

How to Get the Best Car Loan Rate

👋 Simple Explanation

Financing a car means the lender pays for it today, and you pay them back — plus a bit extra — over the next few years. That "extra" is the interest, and your credit score is the single biggest thing that decides how much extra you'll pay.

Your credit score is the single biggest factor in your auto loan APR. A score of 750+ qualifies you for the best rates — typically 5%–7% for new vehicles in 2025. Scores below 620 may result in rates above 15%, significantly increasing the cost of the loan.

Get pre-approved before you go to the dealership. Banks and credit unions often offer better rates than dealer financing. Knowing your rate in advance gives you negotiating power and prevents dealers from rolling extra profit into the financing terms.

Monthly Payment = P × [r(1+r)^n] ÷ [(1+r)^n − 1]   where P = loan amount, r = monthly rate, n = months

The 20/4/10 Rule for Car Buying

20% — Put at least 20% down. This prevents negative equity (owing more than the car is worth) and typically lowers your APR.

4 years (48 months) — Finance for no more than 4 years. Longer terms (60–84 months) lower the payment but dramatically increase total interest paid and the risk of being underwater on the loan.

10% — Keep total transportation costs (payment + insurance) under 10%–15% of your monthly gross income. On a $70,000 salary, that's a budget of roughly $583–$875 per month total for the car and insurance combined.

Car Loan Calculator — FAQ

What is a good interest rate for a car loan in 2025?
As of 2025, a good car loan APR for buyers with excellent credit (750+) is typically 5%–7% for new vehicles and 7%–10% for used vehicles. The average APR across all credit tiers is around 7%–11% for new cars and 11%–14% for used cars. Rates vary significantly based on your credit score, loan term, and lender type (bank, credit union, or dealership).
Should I choose a shorter or longer car loan term?
A shorter loan term (24–36 months) means higher monthly payments but significantly less total interest paid. A longer term (60–72 months) lowers your monthly payment but you pay more in interest and risk becoming 'underwater' — owing more than the car is worth. Financial experts generally recommend keeping auto loan terms under 60 months and total car payments under 15% of your monthly take-home pay.
How much should I put down on a car?
Most financial advisors recommend a down payment of at least 20% for a new car and 10% for a used car. A larger down payment reduces your loan balance, lowers your monthly payment, and reduces the risk of negative equity. It also typically results in a lower interest rate from lenders.
Does a trade-in reduce my car loan?
Yes. The trade-in value of your current vehicle is subtracted from the purchase price of the new vehicle before financing, reducing the amount you need to borrow. This is functionally equivalent to a cash down payment, though trade-in values may be negotiable. Always get a third-party appraisal (Carmax, KBB Instant Cash Offer) before accepting a dealer's trade-in offer.
What is a good monthly car payment?
The 20/4/10 rule is a popular guideline: put at least 20% down, finance for no more than 4 years (48 months), and keep total vehicle expenses (payment + insurance) under 10%–15% of your gross monthly income. So if you earn $6,000/month, your car payment plus insurance should ideally stay under $600–$900.