Auto Loan Calculator - NerdWallet (2024)

Enter your preferred loan details to see loans that match your selections.

Our auto loan calculator doubles as a car affordability calculator that shows an estimated monthly payment and an auto loan amortization calculator that breaks down how you’ll pay off the loan over time. Input the relevant information — such as vehicle price, interest rate, down payment amount, trade-in value, length of the loan, sales tax rate and registration fees — to see your results.

You can change what you input to see how different factors will affect your car payment amount and total interest cost.

What you should know about borrowing for a car

If you haven’t financed a vehicle before, it may help to have a quick overview of how car loans work. Most people can’t pay cash for a car or truck, and so they apply for an auto loan, usually at a bank, credit union, online lender or the car dealership. When you’re approved, the lender provides a lump sum of money to pay for the vehicle you’re buying. You receive the vehicle to drive, while at the same time making monthly loan payments until you fully repay the loan.

Different aspects of a car loan (some that you can control more than others) contribute to what you will pay monthly and over the life of the loan. Our car loan calculator is a tool to try different values and plan for what you will spend.

» Want to shop around? Compare lenders to find the best auto financing available

How to use the car loan calculator

Here’s a description of the information you can input into this car loan calculator, some required and some optional.

Price of vehicle. Input the price you think you’ll pay for the car. To estimate a new car’s prices, start with the vehicle’s sticker price (also called the MSRP). Subtract any savings from dealer negotiations or manufacturer rebates. Then add extra costs, such as vehicle options and the “destination fee" charged on new cars.

For used cars, estimating the sale price is a bit trickier. You can start with the seller’s asking price, but you may be able to negotiate that lower. To get an idea of a fair price, use online pricing guides or check local online classified ads for comparable cars.

Interest rate. There are several ways to determine an interest rate to enter. If you get prequalified or preapproved for a loan, simply enter the rate you are offered. Otherwise, you can use the current average interest rate for your credit score.

This table uses Experian average car loan APRs by credit score (based on the VantageScore credit scoring model) and is a good guide:

Credit score

Average APR, new car

Average APR, used car

Superprime: 781-850.

5.38%.

6.80%.

Prime: 661-780.

6.89%.

9.04%.

Nonprime: 601-660.

9.62%.

13.72%.

Subprime: 501-600.

12.85%.

18.97%.

Deep subprime: 300-500.

15.62%.

21.57%.

Source: Experian Information Solutions, 1st quarter 2024.

Number of months. Enter the loan term, or the length of time you have to pay off the loan. Car loans are usually in 12-month increments, with common terms being 24, 36, 48, 60, 72 or 84 months. NerdWallet recommends trying to go no more than 60 months, if possible. Longer terms will lower your monthly payment, but you will pay much more in interest overall.

Down payment (optional). Enter the total amount of cash you plan to put toward the car. Not all lenders require a down payment, but NerdWallet suggests putting down at least 20% of a new car's purchase price, or 10% for a used car. If you can't afford this amount, put down as much as you can without draining your savings or emergency funds. Putting any amount down will help lower what you finance and the total cost of the loan.

Trade-in value (optional). Enter the trade-in value of your existing vehicle, if any. You can use online sites for appraisals and pricing help. When using a pricing guide, make sure you check the trade-in value and not the retail cost (the price at which the dealer sells the car). You can also get cash purchase offers from online retailers such as CarMax or Carvana to use as a baseline.

Amount owed on trade-in (optional). If you’re still paying on a loan for the vehicle you plan to trade in, enter the remaining balance here. This is the payoff amount, which can be provided by your lender.

» MORE: What is car loan amortization?

Next steps: Using the auto loan calculator results

The information you get from an auto loan calculator can be valuable in many different ways.

When comparing loan offers. You don’t have to take the loan offered by a dealership or online car retailer, and you can bring your own financing from a bank, credit union or other lender. Apply to several lenders for preapproved loan offers, but do it within a two-week timeframe to lessen any impact to your credit score. Using the auto loan calculator, enter interest rates and terms from the various loan offers to compare monthly payments and total loan costs. If you’re buying from a dealership, take the lowest-rate loan offer with you, to see if the dealer can beat it.

When deciding on a loan term. Lenders and car dealers often will reduce a monthly car payment by lengthening the loan term. While a lower payment may look great, an auto loan calculator can help you see total cost, and not just the monthly payment, with various loan terms.

For example, a car buyer considering a $40,000 new car loan with an 84-month term at 9% APR would have a monthly car payment of about $623 and pay $12,369 in interest over the seven-year loan. Shortening the term to 60 months would increase the monthly payment to $811, but it would reduce the total interest paid to $8,600.

To figure in additional expenses. Car buyers often don’t anticipate certain costs on top of the price of the car and loan — such as state and local taxes, dealer documentation fee (which can vary widely) and registration fees. Under Add Advanced Info, NerdWallet’s auto loan calculator enables you to capture these costs. To obtain estimates, you can search online, call your Bureau of Motor Vehicles or contact a dealership to ask for average costs in your area.

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» Want to shop around? Read our roundups for new and used purchase loans and for refinancing your auto loan

Other NerdWallet auto calculators

While this auto loan calculator provides the basic information you’ll need to finance and buy a car, here are some other auto calculators you might want to try.

  • Auto loan affordability calculator. If your budget allows only a certain monthly car payment, determine the maximum amount you can spend on a car. Our reverse auto loan calculator provides this information too.

  • Auto loan refinancing calculator. If you already have an auto loan, see if you could save money by comparing your current loan with a new one.

Frequently asked questions

How is a monthly car payment calculated?

A lender’s loan offer will include the total amount you’re financing (called principal) and the amount you will pay in interest for borrowing the money. Earlier in a loan, a higher portion of your monthly payment will go to paying interest and less to principal. As you pay down the balance of the loan, you will pay less in interest. This process is called amortization.

Auto loan calculators and car payment calculators automatically account for amortization, so these tools are the easiest way to figure a car payment. But whether you’re using a calculator or figuring by hand, the equation for a monthly car payment is the same.

It’s total loan amount (including interest) divided by the loan term (number of months you have to repay the loan. For example, the total interest for a $30,000, 60-month loan at 7% would be $6,497.40. So the monthly payment would be $608.29 ($30,000 + $6,497.40 ÷ 60 = $552.50).

Auto Loan Calculator - NerdWallet (2024)

FAQs

Are online auto loan calculators accurate? ›

Payment calculators are great at giving you an estimated amount that you will pay for a car. But they don't give you an exact amount. The exact amount can vary heavily if you over or underestimate the amount of interest you are paying on a car or the amount the car will cost.

What is the rule of 78 loan calculator? ›

Calculating Rule of 78 Loan Interest

It is often used by short-term installment lenders who provide loans to subprime borrowers. In the case of a 12-month loan, a lender would sum the number of digits through 12 months in the following calculation: 1 + 2 + 3 + 4 + 5 + 6 + 7 + 8 + 9 + 10 + 11 + 12 = 78.

How much should I spend on a car if I make $40,000 a year? ›

According to our research, you shouldn't spend more than 10% to 15% of your net monthly income on car payments. Your total vehicle costs, including loan payments and insurance, should total no more than 20%. You can use a car loan calculator to calculate a monthly payment within your budget.

How much should I spend on a car if I make $60,000? ›

How Much Should I Spend on a Car if I Make $100,000?
Annual SalaryAffordable Monthly Payment (based on 15% of average take-home income)Vehicle Price (assuming 20% down and 60-month loan term)
$50,000$508.50$34,000
$55,000$556.20$36,873
$60,000$598.05$39,591
$65,000$639.75$42,300
7 more rows
Mar 21, 2024

What FICO score do auto lenders use? ›

FICO Score 5 and FICO Score 8 are both common credit scores. Mortgage and auto lenders often use FICO Score 5, while credit card issuers typically use FICO Score 8.

How much would payments be on a $30,000 car? ›

A $30,000 auto loan balance with an average interest rate of 5.0% paid over a 6 year term will have a monthly payment of $483. In total, the loan will cost $34,787 with $4,787 in interest.

Is the Rule of 78 illegal? ›

Key takeaways. Rule of 78 can only be used on loans lasting less than 61 months. If a lender uses this rule, you'll pay more toward interest in the first months of repayment. Not many lenders use the Rule of 78, as it has been banned in some states.

What is the Rule of 72 on a car loan? ›

Just divide 72 by your interest rate, and there you have how long it would take for the loan or investment amount to double. So, 1% would take 72 years to double. 5% takes about 15 years to double. 10% takes 7.2 years to double.

How much is a 200 000 loan at 7 percent? ›

At a 7.00% fixed interest rate, your monthly payment on a 30-year $200,0000 mortgage might total $1,331 a month, while a 15-year might cost $1,798 a month.

What car can I afford with an 80k salary? ›

on the price of a car. is not to exceed 35% of your gross income. That means if you make $40,000 a year, the cars price should not exceed $14,000. If you make $80,000, the cars price should be below $28,000. And at 150 k salary, that means your max car price should be 50 2500.

How much should my car be if I make 100k a year? ›

50% of Your Income Across All Vehicles

Similarly, if your family earns $100,000 per year total, the total value of all of your vehicles shouldn't be worth more than $50,000.

What car can I afford with a 50k salary? ›

Start With Your Gross Income

To get an idea of how much car you can afford, a good rule of thumb is to pay no more than 35% of your annual pre-tax income. So, if you make $50,000 before taxes per year, your car purchase price should not exceed $17,500.

What is considered a high car payment? ›

According to experts, a car payment is too high if the car payment is more than 30% of your total income. Remember, the car payment isn't your only car expense! Make sure to consider fuel and maintenance expenses. Make sure your car payment does not exceed 15%-20% of your total income.

Is $500 a month a high car payment? ›

An affordable car payment would be one that doesn't exceed $600 a month, based on the rule of thumb that your car payment shouldn't be more than 15% of your take-home pay. If you take out a 60-month car loan at 8% APR, you should aim to take out a car loan of less than $30,000.

Is it better to finance a car or pay cash? ›

Although paying cash helps you save money, you'll miss out on an opportunity to build credit. Making consistent, on-time payments on an auto loan can be helpful in improving your credit score. You can't take advantage of dealer incentives. Dealers commonly offer incentives to finance a vehicle through them.

Are online loan calculators accurate? ›

Online mortgage calculators are widely used by first-time homebuyers, but they are one of the most dangerous financial tools because they provide misleading information.

How do you accurately calculate car payments? ›

Car loan payment formula

Our car finance calculator uses the following formula to calculate the monthly payment: Monthly payment = (loan amount) × (interest rate / 12) / (1 − (1 + (interest rate / 12)) ^ (-loan term)). The interest rate is given for a period of one year.

Are online mortgage estimates accurate? ›

Mortgage calculators provide general estimates based on the information you input, such as loan amount, interest rate, and loan term. While they offer a close approximation, keep in mind that actual payments may vary based on factors like taxes, insurance and interest rates.

What three factors do you need to know when using a car loan payment calculator? ›

Here are the 3 major factors that affect both your monthly payment and the total amount you'll pay on your loan:
  • The loan amount. It can be significantly less than the value of the car, depending on whether you have a trade-in vehicle and/or making a down payment.
  • The annual percentage rate. ...
  • The loan term.

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