Auto Loan Calculator
Estimate your monthly car payment, total interest, and full payoff schedule for a new, used, or certified pre-owned vehicle. Model price, down payment, trade-in, sales tax, APR, and term — with 2026 credit-score-based rate guidance and 20/4/10-rule affordability checks built in.
| Year | Principal | Interest | Balance |
|---|---|---|---|
| Year 1 | $5,498 | $2,221 | $26,602 |
| Year 2 | $5,924 | $1,794 | $20,678 |
| Year 3 | $6,384 | $1,334 | $14,294 |
| Year 4 | $6,880 | $839 | $7,414 |
| Year 5 | $7,414 | $305 | $0 |
Recommended next steps
How it works
- 1Enter the vehicle price
Use the negotiated out-the-door price, not the sticker.
- 2Subtract down payment + trade-in
Both reduce the loan amount dollar-for-dollar.
- 3Add taxes and pick a term
Sales tax is usually rolled into the loan. 48–60 months is the sweet spot.
- 4Match APR to your credit tier
Super-prime ~6–7%, prime ~7–8.5%, near-prime ~9.5–12%, subprime 13.5–17%+ (2026 averages). Used cars run ~1% higher.
- 5Check the 20/4/10 rule
At least 20% down, no more than 4 years, and total transportation costs under 10% of gross income.
Buying a car is one of the largest purchase decisions most people make outside of housing, and the auto loan is where the real long-term cost is decided. The monthly payment gets advertised, but the true numbers that matter are the APR you pay, the total interest over the life of the loan, and how much of the vehicle's value you actually own at each point in time. This auto loan calculator lets you model all of them together — enter the vehicle price, down payment, trade-in value, sales tax, APR, and loan term to see your monthly payment, full amortization schedule, and total interest paid.
New vs used vs certified pre-owned vehicle financing behaves very differently. New cars typically qualify for the lowest advertised APRs — sometimes 0% during manufacturer promotions — but a new car loses roughly 20% of its value in year one and about 30% by year three, which means a small down payment leaves you underwater almost immediately. Used cars finance at slightly higher rates (typically 0.5–1.5% above new) but you skip the steepest depreciation, so a $25,000 three-year-old car often costs less over its full life than the same $35,000 model bought new. Certified pre-owned (CPO) sits between the two: dealer inspection, an extended manufacturer warranty, and financing rates closer to new-car pricing, at a modest premium over private-sale used.
Dealer financing, bank financing, and credit union financing are not the same product. Dealer financing is arranged through the F&I (finance and insurance) office, which almost always earns a 'dealer reserve' markup — often 1–2 percentage points added to the rate the lender would otherwise offer. Getting pre-approved with your bank or credit union first is the single most effective negotiating move you can make. Credit unions typically offer the lowest APRs on both new and used vehicles, followed by online direct lenders (LightStream, Autopay, myAutoloan), then major banks, then dealer financing. Manufacturer captive lenders (Toyota Financial, Ford Credit, GM Financial) can be the cheapest option when the manufacturer is subsidizing rates — always compare 'take the promo rate' against 'take the cash rebate and finance elsewhere' before signing.
Credit score has more effect on your APR than any other factor. Experian's most recent State of the Automotive Finance Market puts average new-car APRs in 2026 at roughly 6.0–7.0% for super-prime (760+), 7.0–8.5% for prime (700–759), 9.5–12% for near-prime (660–699), 13.5–17% for subprime (580–659), and above 17% for deep subprime. Used-car rates typically run 1.0–2.0 points higher than new across every tier. Because the tiers are stepped, a 15-point credit-score improvement can cross you into a materially better tier — well worth waiting 60–90 days for if you're close to a boundary.
Understanding depreciation is essential to understanding auto loan risk. A new vehicle typically loses about 20% of its value in year one, roughly 15% in year two, and another 10–12% per year for the next several years — meaning most new cars are worth about 50% of their sticker price by year five and 25–35% by year eight. Cars depreciate whether they're paid off or financed; the loan just determines whether you owe money on that shrinking asset. This is why matching loan term to depreciation curve matters so much — a 48-month loan on a car that holds 60% of its value at year four keeps you above water throughout. An 84-month loan on the same car keeps you underwater for at least the first four years.
Long loan terms — 72 and 84 months — are the most common source of auto-loan regret. The lower monthly payment is real, but three things get worse simultaneously: total interest paid roughly doubles versus a 48-month loan, you stay underwater for years, and if you need to sell or trade the vehicle mid-loan, you have to bring cash to close the gap. A borrower financing a $40,000 vehicle at 8% pays roughly $6,800 in interest over 48 months, $10,400 over 60 months, $13,200 over 72 months, and $16,300 over 84 months — for the exact same car. If the vehicle only fits your budget at 84 months, it's almost always the wrong vehicle.
Trade-in versus private sale is a real dollars-and-cents decision. Dealers typically offer 10–20% less than private-sale value because they need margin to recondition and resell. Get a firm cash offer from CarMax, Carvana, or a similar buyer before you set foot in the dealership — that number is your negotiating floor. If you owe money on the trade-in, get a written 10-day payoff quote from your current lender first, because dealers occasionally 'forget' the payoff timing and charge you an extra month of interest. Private sale usually nets 5–15% more than trade-in but requires listing, showing, and handling title transfer yourself.
Sales tax, registration, dealer documentation fees, and optional add-ons like GAP insurance dramatically affect the real cost of the loan. Sales tax in most US states is 4–9% of the vehicle price minus trade-in credit, and most states let you finance it — meaning you pay APR interest on the tax for the full loan term. Documentation fees vary from $75 in regulated states to $800+ in unregulated markets and are almost always negotiable. GAP insurance (which covers the gap between what you owe and what insurance pays if the car is totaled) is useful when you finance more than 100% of the vehicle's value or take a long term with a small down payment — but the dealer price is typically 200–400% of the same coverage from your own auto insurer.
The 20/4/10 rule is the simplest and most widely-cited auto-affordability guardrail. Put at least 20% down, finance for no more than 4 years, and keep total transportation costs — loan payment, insurance, fuel, and average monthly maintenance — under 10% of gross monthly income. Applied to a $60,000 household income (~$5,000/month gross), that means transportation under $500/month all-in. That constraint usually caps the loan at a $18,000–$22,000 vehicle. The rule feels strict because most Americans overspend on cars — but sticking to it is one of the highest-ROI personal-finance decisions available, freeing hundreds of dollars per month that compound in retirement accounts over decades.
Lease vs finance is a separate decision with a clear pattern: leasing is cheaper month-to-month for the same vehicle but more expensive over time because you never build equity. A 36-month lease on a $40,000 vehicle typically runs $450–$600/month with $2,000–$3,000 due at signing, and at the end you own nothing. Financing the same vehicle at 7% over 60 months costs about $792/month but leaves you with a paid-off asset worth $18,000–$22,000. Buying and keeping a car for 8–10 years is almost always the lowest total cost per mile. Lease only if you specifically want a new car every 2–3 years and drive under 12,000 miles per year.
Reducing total interest paid comes down to five levers, in order of impact: qualify for a better APR (bigger down payment, stronger credit, credit-union pre-approval, or a manufacturer promo), choose a shorter term, pay extra to principal each month, refinance if rates drop or your credit improves 50+ points, and avoid rolling fees and add-ons into the loan. On a $30,000 / 60-month loan, dropping the APR from 9% to 6% saves about $2,500 in interest. Cutting the term from 60 to 48 months saves another $1,000. Paying an extra $50/month saves another $500. Small levers combine into meaningful money over the life of the loan.
Example scenarios
Loan amount ~$22,000. Monthly payment ~$525, total interest ~$3,200. Practical takeaway: this is a textbook 'right-sized' used-car loan — sub-60-month term, meaningful down payment, and you'll build equity from month one instead of being underwater.
Loan ~$30,000. Monthly payment ~$601, total interest ~$6,060. Practical takeaway: at 5 years and roughly 14% down this is right on the edge of the 20/4/10 rule. Push the term to 48 months if you can and skip any dealer add-ons to keep total cost under control.
Loan ~$36,000. Monthly payment ~$713, total interest ~$6,780. Practical takeaway: 20% down keeps you above water even after year-one depreciation. If your gross income is under about $85K, this payment plus insurance and fuel will crowd out other savings goals.
Loan ~$45,000. Monthly payment ~$702, total interest ~$14,000. Practical takeaway: same monthly payment as the example above, but you pay more than double the interest and stay underwater for the first 4–5 years. This is the classic '84-month trap' that turns a $45K car into a nearly $60K decision.
Loan ~$54,000. Monthly payment ~$963, total interest ~$15,300. Practical takeaway: only 10% down on a rapidly-depreciating truck means negative equity for 3+ years. If the transportation-costs total (loan + insurance + fuel + maintenance) exceeds 15% of gross income, this is out of budget regardless of what the dealer approves.
Loan ~$24,000. Monthly payment ~$498, total interest ~$5,880. Practical takeaway: private-sale used cars typically finance at ~1% higher than dealer used because banks see them as riskier. The 20% down + 60-month combination still keeps you above water and inside the 20/4/10 rule.
Loan ~$40,000. Monthly payment ~$783, total interest ~$6,976. Practical takeaway: if the manufacturer offers 0% financing for qualified buyers, take it — the interest savings ($7K+ here) far outweigh most cash-rebate alternatives. Always compare the promo's total cost against 'take the rebate, finance separately'.
Effective loan ~$23,000. Monthly payment ~$434, total interest ~$8,240. Practical takeaway: rolling negative equity into a new loan is the fastest way to stay underwater indefinitely. Better options: keep the current car until it's paid off, sell it privately to close the gap, or bring cash to close the deficit before financing.
What affects your result?
The single biggest lever on your APR. Moving from 660 (near-prime) to 740 (super-prime) can cut your rate 4–6 points, saving $3,000–$8,000 over a typical 60-month loan. Check your score before shopping and delay 2–3 months if you're close to a tier boundary.
Longer terms lower the monthly payment but dramatically increase total interest and negative-equity risk. The same $30,000 loan at 8% costs about $6,500 in interest over 48 months, $9,700 over 72 months, and $12,500 over 84 months.
20% down on new / 10% on used is the standard target. Beyond lower monthly payments, a real down payment prevents negative equity, unlocks better rates from some lenders, and makes GAP insurance unnecessary.
Used vehicles typically finance at 0.5–1.5% higher APR than new, and private-sale used at 1–2% higher than dealer used. But used cars skip the steepest depreciation, so total cost of ownership is usually lower even at a higher rate.
Most states let you roll sales tax (typically 4–9% of price) into the loan. Documentation fees vary wildly ($75–$800+). Registration and title fees are usually a few hundred dollars. All of it accrues interest at your APR if financed, so paying tax and fees in cash where possible saves real money.
Credit unions typically offer the lowest APRs (often 0.5–1.5% below banks), followed by online lenders, then major banks, then dealer financing. Manufacturer captive lenders can be the cheapest option when there's an active 0% or subsidized-rate promotion.
Common mistakes to avoid
- Signing 72 or 84-month loans just to lower the monthly payment — you'll pay 50–100% more interest and stay underwater for years.
- Financing dealer add-ons (VIN etching, paint protection, nitrogen tires) at your loan's APR when they add almost no resale value.
- Skipping a bank or credit union pre-approval and letting the dealer's F&I office set the rate — the dealer markup alone can add 1–2% APR.
- Rolling negative equity from a trade-in into the new loan instead of closing the gap with cash or waiting.
- Buying GAP insurance or an extended warranty at the F&I desk without pricing third-party alternatives — dealer markups routinely run 200–400%.
- Focusing on the monthly payment instead of total cost, term length, and APR. A lower payment often hides a much longer loan and much more interest.
Common questions
What's a typical auto loan interest rate in 2026?
Rates depend heavily on credit score, loan term, and whether the vehicle is new or used. As of 2026, super-prime borrowers (760+) typically see about 6.0–7.5% APR on new cars and 6.5–8.0% on used. Prime borrowers (700–759) run about 1 point higher. Near-prime (660–699) commonly see 9–12%, and subprime (below 660) often exceeds 14–17% APR — particularly on used vehicles. Always compare a bank or credit union pre-approval against dealer financing before you sign.
How much should I put down on a car?
The conservative targets are 20% down on a new vehicle and 10% down on used. A larger down payment reduces the loan amount, lowers the monthly payment, cuts total interest, and — critically — prevents you from being 'underwater' (owing more than the car is worth) as depreciation kicks in. If you can't reach those percentages, either shop a cheaper car or wait a few months and keep saving.
What is the best auto loan term?
48–60 months is the sweet spot for most buyers. 36 months minimizes total interest but the monthly payment can be high. 72 and 84-month loans lower the monthly payment but you'll pay significantly more interest and stay underwater for years — often almost the entire loan. If a car only fits your budget at 84 months, it's usually the wrong car.
Should I refinance my auto loan?
Refinancing is worth serious consideration if your credit has improved by 50+ points since origination, market rates have dropped at least 1–2 points, or you originally took dealer financing at an inflated markup. Run the numbers: divide any refi fees by the new monthly savings to see how many months it takes to break even. Refinancing typically makes the most sense in the first 12–36 months of the loan while there's still meaningful interest to save.
Does a cosigner help me get a better auto loan?
Yes — a cosigner with strong credit can qualify you for a loan you'd otherwise be denied and can meaningfully reduce your APR. The cosigner is legally responsible for the debt if you miss payments, and it appears on their credit report, so it's a serious commitment on their part. Have a written agreement, keep a shared payment tracker, and refinance the loan into your own name as soon as your credit qualifies.
What is negative equity and how do I avoid it?
Negative equity means you owe more on the loan than the car is worth — a very common situation in the first 1–3 years of a long loan because cars depreciate ~20% in year one and ~50% by year five. Rolling negative equity from an old car into a new loan compounds the problem. Avoid it by putting at least 20% down, choosing a term of 60 months or less, and skipping optional add-ons that inflate the loan without adding resale value.
Should I buy new, used, or certified pre-owned?
A lightly-used vehicle (2–4 years old) usually offers the best overall value — you skip the steepest depreciation while still getting most of the car's useful life. Certified pre-owned (CPO) sits between new and used: higher price than a private-sale used car, but you get manufacturer inspection, extended warranty, and typically better financing rates. New makes sense mainly if you want the latest safety tech, need warranty coverage for high annual mileage, or you're taking advantage of a manufacturer 0% APR promotion.
Are auto loan prepayment penalties common?
Most US auto loans from banks and credit unions have no prepayment penalty, but a handful of subprime lenders still include them. Always read the loan agreement's 'prepayment' section before signing and confirm you can pay extra to principal at any time without a fee. If a penalty exists, negotiate to have it removed or choose a different lender.
Should I buy GAP insurance and an extended warranty?
GAP insurance covers the gap between what you owe and what the insurance company pays if the car is totaled. It's worth considering when you're financing more than 100% of the vehicle's value, put less than 20% down, or chose a term of 72+ months. Extended warranties are usually a poor value on reliable brands and are almost always cheaper from a third party than the F&I office. Never say yes to either at the dealer without pricing them independently.
How do dealer add-ons like VIN etching, paint protection, and nitrogen tires affect my loan?
These 'F&I' add-ons are the dealership's highest-margin products and are typically rolled into the loan, so you finance them at your APR for the full term. A $1,200 paint protection package financed at 8% over 72 months costs you closer to $1,500 in total. Decline them at the dealer, then buy any you genuinely want (like a real extended warranty or GAP) from a third party at a fraction of the cost.
How does the 20/4/10 rule work?
The 20/4/10 rule is a simple affordability guardrail: put at least 20% down, finance for no more than 4 years (48 months), and keep total transportation costs — loan payment plus insurance, fuel, and average maintenance — under 10% of your gross monthly income. If a car fails any of the three tests, it's a stretch. This rule keeps you from being trapped in a long loan on a depreciating asset.
Is it cheaper to lease or buy a car?
Leasing is usually cheaper month-to-month for the exact same car but more expensive over the long run because you never build equity. Buying and holding a car for 8–10 years is almost always the lowest total cost per mile. Lease if you specifically want a new car every 2–3 years, drive under 12,000 miles per year, and can accept never owning the vehicle. Otherwise, buy.