Auto Loan Calculator
Planning to buy a new or used car? Our Auto Loan Calculator helps you estimate your monthly car payments and understand the total cost of your loan. By entering a few details about the vehicle price, down payment, trade-in value, interest rate, and loan term, you can get a clear picture of your potential financing.
How This Auto Loan Calculator Works
This calculator helps you determine the financial implications of an auto loan. Here’s a breakdown of the inputs:
- Vehicle Price: The sticker price or negotiated price of the car you intend to purchase.
- Down Payment: The initial amount of money you pay upfront. A larger down payment reduces your loan amount and often your monthly payments.
- Trade-in Value: The value of your current vehicle if you’re trading it in. This amount is typically deducted from the vehicle price.
- Sales Tax Rate: The applicable sales tax in your state or locality. This is usually applied to the vehicle price after deducting the trade-in value.
- Annual Interest Rate (APR): The yearly interest rate charged on your loan. A lower APR means less interest paid over the life of the loan.
- Loan Term: The duration of your loan, typically in years. Longer terms mean lower monthly payments but more total interest paid. Shorter terms have higher payments but less overall interest.
Understanding Your Auto Loan Results
After you input your details and click “Calculate Loan,” you’ll see:
- Estimated Monthly Payment: The amount you’ll likely pay each month towards your loan.
- Total Principal Paid: This is the actual amount borrowed to finance the car after down payment, trade-in, and taxes.
- Total Interest Paid: The total amount of interest you’ll pay over the entire loan term.
- Total Cost of Loan: The sum of the total principal paid and total interest paid, representing the full cost of financing your vehicle.
The monthly payment (M) for a fixed-rate loan is typically calculated using the formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
- P = Principal Loan Amount (Vehicle Price + Sales Tax – Down Payment – Trade-in)
- i = Monthly Interest Rate (Annual Rate / 12 / 100)
- n = Total Number of Payments (Loan Term in Years * 12 for monthly payments)
Disclaimer: This calculator provides an estimate for illustrative purposes only. Actual loan terms, interest rates, and payments may vary based on your creditworthiness, the lender, and other factors. Always consult with a financial advisor or lender for precise figures and advice.