Calculate your monthly car payment, total interest, and see exactly how much that car really costs. Free, instant, no sign-up.
| Month | Payment | Principal | Interest | Balance |
|---|
Car loan payments are calculated using the same amortization formula as mortgages, but with shorter terms (typically 36–84 months). The formula is:
M = P × [ r(1+r)n ] / [ (1+r)n − 1 ]
P = loan amount (car price + tax + fees − down payment − trade-in), r = monthly interest rate, n = number of months.
Car loan rates vary widely based on your credit score, whether the car is new or used, and the loan term. Here are typical ranges:
| Credit Score | New Car (APR) | Used Car (APR) |
|---|---|---|
| 800+ (Excellent) | 5.0%–6.5% | 6.5%–8.0% |
| 700–799 (Good) | 6.5%–9.0% | 8.0%–11.0% |
| 600–699 (Fair) | 9.0%–14.0% | 11.0%–17.0% |
| Below 600 (Poor) | 15.0%–25.0%+ | 18.0%–30.0%+ |
New cars typically have lower rates than used cars because they're less risky for lenders. Dealerships sometimes offer promotional 0%–2.9% financing (but you may lose the cash rebate).
Longer loan terms mean lower monthly payments, but much more total interest:
Example: $35,000 at 7.5% APR: 60 months → $702/mo, $7,120 interest. 72 months → $601/mo, $8,872 interest. The 72-month loan costs $1,752 more for $101/mo savings.
"Upside down" means you owe more than the car is worth. New cars lose 20–30% of value in year one alone. If your car is totaled, insurance pays market value — not your loan balance.
How to avoid it:
New cars depreciate faster but have lower rates and warranty. Used cars are cheaper upfront but have higher rates and repair risk.
Example: New: $35,000 at 6.5%/60mo = $683/mo. Used (3yr): $25,000 at 9%/60mo = $518/mo. The used car saves $165/mo — but a $3,000 repair bill wipes out 18 months of savings. CPO cars are the best compromise.
Your payment is only part of the cost. Factor in:
A $700/mo payment can easily become $900+/mo true cost with insurance, gas, and maintenance.
Leasing is renting for 2–4 years: lower payments, newer car, but you own nothing and have mileage limits.
Lease if: You drive under 12,000 mi/yr, want a new car every 3 years, or can deduct as a business expense.
Buy if: You drive a lot, want to own long-term. Buying is almost always cheaper if you keep the car 6+ years.