Auto Loan Calculator
Calculate your monthly car payments, total interest costs, and view detailed amortization schedules. Make informed decisions on your next vehicle purchase.
Vehicle Details
Enter the vehicle price and your payment options
Loan Terms
Configure your loan interest rate and term
How Auto Loans Work
An auto loan is a secured loan where the vehicle serves as collateral. The lender provides funds to purchase the car, and you repay the loan with interest over a set term. If you default on payments, the lender can repossess the vehicle.
New Car Loans
- Lower rates: Typically 1-3% lower than used car loans
- Longer terms: Up to 84 months available
- Manufacturer incentives: 0% APR deals available
- Higher depreciation: Cars lose 20% value in year one
Used Car Loans
- Higher rates: More risk for lenders
- Shorter terms: Usually 36-60 months
- Lower prices: Significant savings on purchase price
- Less depreciation: Slower value loss
2024 Average Auto Loan Rates by Credit Score
| Credit Score | Credit Tier | New Car APR | Used Car APR |
|---|---|---|---|
| 781-850 | Super Prime | 5.18% | 7.22% |
| 661-780 | Prime | 6.83% | 9.24% |
| 601-660 | Near Prime | 9.75% | 13.42% |
| 501-600 | Subprime | 12.81% | 18.52% |
| 300-500 | Deep Subprime | 14.59% | 21.18% |
Source: Experian State of the Automotive Finance Market Q4 2023. Rates fluctuate based on Federal Reserve policy and market conditions.
The 20/4/10 Rule for Car Buying
Financial experts recommend the 20/4/10 rule to avoid becoming "car poor":
Put at least 20% down to avoid being underwater on the loan
Keep loan to 4 years or less to minimize interest and depreciation overlap
Total car costs (payment, insurance, gas) should be under 10% of income
True Cost of Car Ownership
Your monthly payment is just one piece of the puzzle. Here's what a $35,000 car really costs over 5 years:
| Cost Category | Monthly | 5-Year Total |
|---|---|---|
| Loan Payment (7% APR, 60 mo) | $693 | $41,580 |
| Insurance (Full Coverage) | $150 | $9,000 |
| Gas (12,000 mi/yr, 30 MPG) | $133 | $8,000 |
| Maintenance & Repairs | $100 | $6,000 |
| Depreciation | $292 | $17,500 |
| TOTAL | $1,368 | $82,080 |
A $35,000 car can cost over $82,000 in 5 years when you include all ownership costs.
Smart Car Buying Strategies
Before You Shop
- ✓Get pre-approved from your bank or credit union first
- ✓Check your credit score and dispute any errors
- ✓Research the invoice price, not just MSRP
- ✓Get trade-in quotes from CarMax, Carvana, and dealers
- ✓Set your maximum budget and stick to it
At the Dealership
- ✓Negotiate the total price, not the monthly payment
- ✓Shop at the end of the month for better deals
- ✓Be prepared to walk away - dealers expect it
- ✓Avoid dealer add-ons (paint protection, fabric coating)
- ✓Read all paperwork carefully before signing
When to Refinance Your Auto Loan
Refinancing your auto loan can save you thousands. Consider refinancing when:
Good Times to Refinance
- Your credit score has improved 50+ points
- Market rates have dropped significantly
- You got a high dealer rate initially
- You want to lower monthly payments
- You want to pay off the loan faster
When to Skip Refinancing
- Your car is older than 7 years
- You owe more than the car is worth
- Less than 12 months left on your loan
- Prepayment penalties exceed savings
- Your current rate is already excellent
Frequently Asked Questions
How much car can I afford?
Following the 20/4/10 rule, your total transportation costs (payment, insurance, gas, maintenance) should not exceed 10% of your gross monthly income. If you earn $60,000/year ($5,000/month), aim for total car costs under $500/month.
Is a longer loan term a good idea?
While longer terms (72-84 months) offer lower monthly payments, they cost significantly more in total interest and increase the risk of being "underwater" (owing more than the car is worth). Stick to 48-60 months if possible.
Should I buy or lease?
Buying is usually better if you drive a lot, keep cars for 5+ years, or want to build equity. Leasing may work if you want a new car every 2-3 years, drive under 12,000 miles annually, and prefer lower monthly payments without ownership.
What fees should I watch out for?
Watch for documentation fees (often negotiable), dealer prep fees (already included in price), VIN etching (overpriced), extended warranties (usually unnecessary for new cars), and gap insurance (cheaper through your insurer than the dealer).
How do I get the best auto loan rate?
Improve your credit score before shopping, get pre-approved from multiple lenders (credit unions often have the best rates), make a larger down payment, choose a shorter loan term, and consider certified pre-owned vehicles which often qualify for lower rates than regular used cars.