Auto Loan Calculator
Calculate auto loan payments, total costs, and amortization schedules with adjustments for taxes, fees, and trade-ins. Essential for car buyers comparing financing options and loan terms.
Auto Loan Details
Loan Summary
Monthly Payment
Loan Totals
Amortization Schedule
| Year | Principal | Interest | Remaining Balance |
|---|---|---|---|
| 1 | $7,222.21 | $1,835.98 | $32,777.79 |
| 2 | $7,591.71 | $1,466.48 | $25,186.08 |
| 3 | $7,980.12 | $1,078.07 | $17,205.96 |
| 4 | $8,388.40 | $669.80 | $8,817.56 |
| 5 | $8,817.56 | $240.63 | $0.00 |
Understanding Auto Loans
How Auto Loans Work
Secured by Vehicle
The car, truck, or SUV you're purchasing serves as collateral for the loan. This security allows lenders to offer lower interest rates than unsecured loans.
Fixed Monthly Payments
Most auto loans have fixed monthly payments that include both principal and interest. Your payment amount stays the same throughout the loan term.
Common Loan Terms
Typical auto loan terms range from 36 to 84 months (3-7 years). Shorter terms mean higher monthly payments but less total interest paid.
Interest Rates Vary
Rates depend on your credit score, loan term, vehicle age, and market conditions. New cars often qualify for better rates than used vehicles.
Key Auto Loan Components
- Vehicle Price: The total cost of the car including any dealer-installed options
- Down Payment: Upfront cash payment that reduces your loan amount and monthly payments
- Trade-in Value: Credit applied from your current vehicle toward the new purchase
- Loan Amount: Vehicle price minus down payment and trade-in value
- Annual Percentage Rate (APR): The total cost of the loan including interest and fees, expressed annually
- Loan Term: The length of time you have to repay the loan, typically 3-7 years
Auto Loan Financing Options
Financing Source Comparison
Banks & Credit Unions
Often offer competitive rates and pre-approval. Credit unions typically have lower rates for members. Getting pre-approved gives you negotiating power at the dealership.
Dealership Financing
Convenient one-stop shopping, but may have higher rates. Dealers sometimes offer manufacturer incentives like 0% APR promotions that can beat bank rates.
Online Lenders
Quick pre-approval process and competitive rates. Good for comparing multiple offers quickly, though you'll need to coordinate payment with the dealer.
Manufacturer Financing
Captive finance companies (like Ford Credit, Honda Financial) often offer promotional rates and incentives, especially on new vehicles.
Getting the Best Auto Loan Rate
- Check Your Credit Score: Scores above 700 typically qualify for the best rates. Get a free credit report and fix any errors before applying
- Shop Multiple Lenders: Compare rates from banks, credit unions, and online lenders. Rate shopping within 14-45 days counts as one credit inquiry
- Get Pre-Approved: Know your budget and rate before shopping. Pre-approval gives you negotiating power and prevents dealer markup
- Consider New vs. Used: New cars often qualify for lower rates and longer terms. Used cars may have higher rates but cost less overall
- Time Your Purchase: End of model years, months, and quarters often have the best manufacturer incentives and dealer motivation
Auto Loan Costs & Savings Strategies
Additional Costs to Consider
Sales Tax
Varies by state from 0% to 10%+. Some states allow you to finance sales tax as part of your loan, while others require payment upfront.
Title & Registration Fees
State-mandated fees for vehicle title transfer and registration. These typically range from $50 to several hundred dollars depending on your state.
Documentation Fees
Dealer charges for processing paperwork, usually $100-$500. Some states cap these fees, while others allow dealers to charge whatever they want.
Destination Charges
Manufacturer fee for shipping the vehicle from factory to dealer, typically $900-$1,500. This fee is usually non-negotiable.
Money-Saving Strategies
- Larger Down Payment: Reduces loan amount, monthly payments, and total interest. Aim for 10-20% down to avoid being underwater on the loan
- Shorter Loan Terms: Higher monthly payments but significantly less total interest. A 36-month loan costs much less than 72 months overall
- Trade-In Tax Benefits: In most states, you only pay sales tax on the difference between new car price and trade value, saving hundreds or thousands
- Manufacturer Incentives: Look for cash rebates, low APR offers, or special financing. Sometimes 0% financing beats taking a cash rebate
- End-of-Year Timing: Shop for previous model year vehicles or time purchases for end-of-month/quarter when dealers need to meet quotas
Cash vs. Financing Decision
Consider Paying Cash When:
You have plenty of emergency savings remaining, interest rates are high (above 6-7%), or you want to avoid monthly payments and own the car outright.
Consider Financing When:
You can get very low rates (0-3%), want to preserve cash for investments or emergencies, or need to build credit history with on-time payments.