Auto Loan Calculator Cars Com

This auto loan calculator helps you estimate your monthly car payments, total interest paid, and loan affordability. Simply enter your loan amount, interest rate, and loan term to get instant results.

How to Use This Calculator

Using our auto loan calculator is simple:

Enter the loan amount you need (the price of the car)
Input your annual interest rate (APR)
Select the loan term in years
Click "Calculate" to see your monthly payment

The calculator will show you:

Monthly payment amount
Total interest paid over the loan term
Total amount paid (principal + interest)
A breakdown of how much goes toward principal vs. interest each month

Formula Used

The calculator uses the standard auto loan payment formula:

M = P [ i(1 + i)^n ] / [ (1 + i)^n - 1 ] Where: M = Monthly payment P = Principal loan amount i = Monthly interest rate (APR/12/100) n = Number of payments (Loan term in years × 12)

This formula accounts for the fact that each payment includes both principal and interest, with the interest portion decreasing over time as the principal balance decreases.

Worked Example

Let's calculate a loan for a $25,000 car with a 5% APR over 5 years:

Principal (P) = $25,000
Annual interest rate = 5% → Monthly rate (i) = 5/12/100 = 0.004167
Loan term = 5 years → Number of payments (n) = 5 × 12 = 60

Plugging into the formula:

M = 25000 [ 0.004167(1 + 0.004167)^60 ] / [ (1 + 0.004167)^60 - 1 ] M ≈ $477.50

So your monthly payment would be approximately $477.50, with $1,370 in total interest paid over the loan term.

Frequently Asked Questions

What is the difference between APR and interest rate?

APR (Annual Percentage Rate) is the total annual cost of borrowing, including all fees and interest. The interest rate is just the portion of APR that goes to interest. APR is always higher than the interest rate.

How does a longer loan term affect my payments?

A longer loan term means lower monthly payments but more total interest paid. A shorter term means higher monthly payments but less total interest. The optimal term depends on your financial situation and goals.

What is the loan-to-value ratio?

Loan-to-value (LTV) is the ratio of your loan amount to the car's value. For example, if you borrow $20,000 on a $25,000 car, your LTV is 80%. Lenders typically require a down payment to keep LTV below 80-85%.