Car Payment Auto Loan Calculator

Use this car payment auto loan calculator to estimate your monthly payments, total interest, and loan cost for a new or used car. Simply enter your loan amount, interest rate, and loan term to get an accurate calculation.

How to Use This Calculator

To calculate your car payment, follow these simple steps:

Enter the loan amount (the total price of the car).
Enter the annual interest rate (APR) offered by the lender.
Select the loan term in years.
Click "Calculate" to see your monthly payment and other details.

The calculator will display your estimated monthly payment, total interest paid over the life of the loan, and the total amount paid (principal + interest).

Formula Used

The car payment is calculated using the standard auto loan formula:

Monthly Payment = P × (r(1 + r)^n) / ((1 + r)^n - 1)

Where:

P = Principal loan amount
r = Monthly interest rate (annual rate divided by 12)
n = Number of payments (loan term in years × 12)

This formula accounts for the interest charged on the outstanding loan balance each month, resulting in a fixed monthly payment.

Worked Example

Let's calculate the monthly payment for a $25,000 car loan with a 5% annual interest rate over 5 years.

Principal (P) = $25,000
Annual interest rate = 5% or 0.05
Monthly interest rate (r) = 0.05 / 12 ≈ 0.004167
Number of payments (n) = 5 years × 12 = 60 months

Monthly Payment = $25,000 × (0.004167(1 + 0.004167)^60) / ((1 + 0.004167)^60 - 1)

Monthly Payment ≈ $462.38

Over 5 years, you would pay approximately $27,742.80 in total, with $2,742.80 going to interest.

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 portion of the APR that applies to the outstanding loan balance.
How do down payments affect my car payment?: A larger down payment reduces the loan amount, which lowers your monthly payment. For example, a $5,000 down payment on a $25,000 car would reduce the loan amount to $20,000, potentially lowering your monthly payment.
Can I pay off my car loan early without penalties?: Many auto loans allow prepayment without penalties. Check your loan agreement to confirm, as some loans may have prepayment fees or require written notice.
What happens if I miss a car payment?: Missing a payment can result in late fees, higher interest charges, and potential damage to your credit score. Contact your lender immediately if you anticipate missing a payment.