Auto Loan Calculator Cargurus
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Reviewed by Calculator Editorial Team
This auto loan calculator helps you estimate your monthly payments, total interest, and loan affordability based on CarGurus-inspired calculations. Simply enter your loan amount, interest rate, and loan term to get an instant analysis.
How to Use This Calculator
Using our auto loan calculator is simple:
- Enter the loan amount you're considering
- Input the annual interest rate (APR)
- Select the loan term in years
- Click "Calculate" to see your results
The calculator will display your estimated monthly payment, total interest paid, and total amount paid over the life of the loan. You can also view a breakdown of principal and interest payments over time.
Formula Used
The monthly payment for an auto loan is calculated using the standard loan payment formula:
Monthly Payment = P × (r(1 + r)^n) / ((1 + r)^n - 1)
Where:
- P = Principal loan amount
- r = Monthly interest rate (APR ÷ 12 ÷ 100)
- n = Number of payments (Loan term in years × 12)
Total interest paid is calculated by subtracting the original loan amount from the total amount paid over the life of the loan.
Worked Example
Let's calculate a $25,000 auto loan with a 4.5% APR over 5 years:
- Principal (P) = $25,000
- Annual interest rate = 4.5%
- Monthly interest rate (r) = 4.5% ÷ 12 ÷ 100 = 0.00375
- Number of payments (n) = 5 × 12 = 60
Plugging these values into the formula:
Monthly Payment = $25,000 × (0.00375(1 + 0.00375)^60) / ((1 + 0.00375)^60 - 1)
Monthly Payment ≈ $454.23
Total amount paid over 5 years: $454.23 × 60 = $27,253.80
Total interest paid: $27,253.80 - $25,000 = $2,253.80
Frequently Asked Questions
- What is the difference between APR and interest rate?
- The annual percentage rate (APR) is the total cost of credit, including any fees, while the interest rate is the cost of borrowing without fees. APR is always higher than the interest rate.
- How does loan term affect my monthly payment?
- A longer loan term means lower monthly payments but more total interest paid. A shorter loan term means higher monthly payments but less total interest paid.
- What is the loan-to-value ratio?
- The loan-to-value ratio (LTV) is the amount you're borrowing divided by the value of the vehicle. Lenders typically require a minimum LTV of 20-30% for auto loans.
- How can I lower my auto loan interest rate?
- To get a lower interest rate, you can improve your credit score, shop around for lenders, consider a longer loan term, or negotiate with the dealership.