Car shopping tends to revolve around one number — the monthly payment — and dealers know it. Stretch the term far enough and almost any car fits a budget. This car loan calculator shows the payment, but it also puts every common term side by side and estimates how long the loan balance would exceed the car’s value, so you can choose a loan that still makes sense in year three.
How to use the car loan calculator
- Enter the car price and your down payment, in dollars or as a percentage.
- Enter the APR you have been offered and choose a loan term from 24 to 84 months.
- Optionally adjust the depreciation estimate: how much value the car loses in its first year and in each later year.
- Add a first payment date to see when the last payment falls.
- Review the payment, the term comparison table and the chart of loan balance against estimated car value.
Car payment formula
P is the amount financed (price minus down payment), r is the APR ÷ 12 and n is the number of monthly payments. The estimated value after m months uses the first-year loss d1 and the later yearly loss d:
Worked example
A $32,000 car with $3,000 down, financed at 6.9% APR for 60 months:
Amount financed: 32,000 − 3,000 = $29,000
r = 0.069 ÷ 12 = 0.00575; (1 + r)60 = 1.410595
M = 29,000 × 0.00575 × 1.410595 ÷ 0.410595 = $572.87 a month
Total interest: $5,372.05, so the car costs $37,372.05 in all.
Comparing loan terms
Same $29,000 at 6.9%:
| Term | Monthly payment | Total interest |
|---|---|---|
| 36 months | $894.11 | $3,187.98 |
| 48 months | $693.10 | $4,268.63 |
| 60 months | $572.87 | $5,372.05 |
| 72 months | $493.03 | $6,498.15 |
| 84 months | $436.27 | $7,646.80 |
Going from 60 to 84 months lowers the payment by $136.60 but adds $2,274.75 of interest — and lenders often charge a higher APR on longer terms, which widens the gap further.
Avoiding negative equity
Cars depreciate fastest when they are new, while a long loan repays principal slowly at first. With no down payment on an 84-month loan for the same car, the calculator estimates you would owe more than the car is worth for nearly four years. That matters if the car is totaled, stolen or needs to be sold early.
Ways to stay ahead of depreciation
- Put at least 10–20% down, or more if you are financing taxes and fees.
- Keep the term to 60 months or less when you can afford the payment.
- Consider a lightly used car, which has already taken its biggest depreciation hit.
- If you must borrow with little down, look at gap insurance.
A common guideline, often called the 20/4/10 rule, suggests 20% down, a loan of no more than four years and total car costs under 10% of gross income. The how much car can I afford calculator applies it to your income. For a full deal with a trade-in, sales tax and fees, use the auto loan payment calculator.
Estimates only. Your lender's Truth in Lending disclosure shows the exact payment, finance charge and APR, and actual car values vary widely.
Frequently asked questions
How is a car loan payment calculated?
Subtract your down payment from the price to get the amount financed, then apply the standard installment formula M = P × r(1 + r)^n ÷ ((1 + r)^n − 1) with the APR divided by 12 and the number of months. A $29,000 loan at 6.9% for 60 months costs $572.87 a month.
Is a 72- or 84-month car loan a good idea?
Longer terms lower the payment but raise total interest and keep you upside down for longer, because cars lose value faster than a long loan is repaid. Stretching the example from 60 to 84 months saves $136.60 a month but adds about $2,275 of interest.
What does it mean to be upside down on a car loan?
It means you owe more than the car is worth, also called negative equity. If the car is totaled or you need to sell, the insurance payout or sale price may not cover the loan. A larger down payment and a shorter term are the best protection; gap insurance covers the shortfall if the car is a total loss.
How accurate is the depreciation estimate?
It is a rough guide. The calculator assumes the car loses a set percentage in the first year and a steady percentage after that. Real values depend on the model, mileage, condition and the used-car market, so adjust the rates or look up your car's market value.
Does this include sales tax and fees?
No. This calculator finances the price minus your down payment. To include a trade-in, sales tax, dealer fees and rebates, use the auto loan payment calculator.