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Cars.com Auto Loan Calculator

Reviewed by Calculator Editorial Team

Buying a car is a significant financial decision. Our Cars.com Auto Loan Calculator helps you estimate your monthly payments, total interest, and loan breakdown before applying for financing. Simply enter your loan amount, interest rate, and loan term to get an accurate estimate.

How to Use This Calculator

Using our Cars.com Auto Loan Calculator is simple:

  1. Enter the loan amount (the total price of the car you want to purchase).
  2. Input the interest rate (the annual percentage rate charged by the lender).
  3. Specify the loan term (the length of the loan in years).
  4. Click the Calculate button to see your estimated monthly payment.

The calculator will display your estimated monthly payment, total interest paid over the life of the loan, and a breakdown of your loan payments.

Formula Used

The calculator uses the standard auto loan payment formula:

Auto Loan Payment 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 calculates the fixed monthly payment for a loan with a fixed interest rate.

Worked Example

Let's calculate the monthly payment for a $25,000 car loan with a 4.5% annual interest rate and a 5-year term.

  1. Principal (P) = $25,000
  2. Annual interest rate = 4.5% or 0.045
  3. Monthly interest rate (r) = 0.045 / 12 ≈ 0.00375
  4. Loan term in months (n) = 5 × 12 = 60

Plugging these values into the formula:

Calculation

Monthly Payment = $25,000 × (0.00375(1 + 0.00375)^60) / ((1 + 0.00375)^60 - 1)

Monthly Payment ≈ $25,000 × (0.00375 × 1.231) / (1.231 - 1)

Monthly Payment ≈ $25,000 × (0.00462) / 0.231

Monthly Payment ≈ $25,000 × 0.01999 ≈ $499.75

The estimated monthly payment for this loan would be approximately $499.75.

Frequently Asked Questions

What is an auto loan?
An auto loan is a type of loan used to purchase a vehicle. It's secured by the vehicle itself and typically has a fixed interest rate and repayment term.
How does the interest rate affect my monthly payment?
A higher interest rate means you'll pay more in interest over the life of the loan, which increases your total loan cost and monthly payments. Conversely, a lower interest rate reduces both your total cost and monthly payments.
What is the difference between APR and interest rate?
APR (Annual Percentage Rate) is the total cost of credit, including fees and interest, expressed as a yearly percentage. The interest rate is the actual percentage charged on the loan balance. APR is always higher than the interest rate.
Can I pay off my auto loan early?
Yes, you can pay off your auto loan early without penalty. Paying extra principal reduces the total interest paid and shortens the loan term.