Auto Loan Calculator

Auto Price Monthly Pay
Loan Termmonths
Interest Rate
Down Payment
Trade-in Value
Your State
Sales Tax
Title, Registration
and Other Fees

Monthly Pay:   $284.44

Total Loan Amount$15,000.00
Upfront Payment$0.00

Total of 60 Loan Payments

$17,066.70
Total Loan Interest$2,066.70
Total Cost (price, interest, tax, fees)$17,066.70



Find Average Tax Rate and Fees in Your State.

Amortization Graph
Loan Breakdown

RelatedCash Back or Low Interest Calculator | Auto Lease Calculator


The Auto Loan Calculator is mainly intended for car purchases within the U.S. People outside the U.S. may still use the calculator, but please adjust accordingly. If only the monthly payment for any auto loan is given, use the Monthly Payments tab (reverse auto loan) to calculate the actual vehicle purchase price and other auto loan information.

Auto Loans

Most people turn to auto loans during vehicle purchase. They work as any generic, secured loan from a financial institution does with a typical term of 36 or 60 months. Each month, repayment of principal and interest must be made from borrowers to auto loan lenders. Money borrowed from a lender that isn't paid back can result in the car being legally repossessed.

Dealership Financing vs. Direct Lending

Generally, there are two main financing options available when it comes to auto loans: direct lending or dealership financing. With the former, it comes in the form of a typical loan originating from a bank, credit union, or financial institution. Once a contract has been entered with a car dealer to buy a vehicle, the loan is used from the direct lender to pay for the new car. Dealership financing is somewhat similar except that the auto loan, and thus paperwork, is initiated and completed through the dealership instead. Auto loans via dealers are usually serviced by captive lenders that are often associated with each car make. The contract is retained by the dealer, but is often sold to a bank or other financial institution called an assignee that ultimately services the loan.

Direct lending provides more leverage for buyers to walk into a car dealer with most of the financing done on their terms, as it places further stress on the car dealer to compete with a better rate. Getting pre-approved doesn't tie car buyers down to any one dealership, and their propensity to simply walk away is much higher. With dealer financing, the potential car buyer has fewer choices when it comes to rate shopping, though it's there for convenience for anyone who doesn't want to spend time shopping, or cannot get an auto loan through direct lending.

Often, to promote auto sales, car manufacturers offer good financing deals via dealers. Consumers in the market for a new car should start their search for financing with car manufacturers. It is not rare to get low interest rates like 0%, 0.9%, 1.9%, or 2.9% from car manufacturers.

Vehicle Rebates

Car manufacturers may offer vehicle rebates to further incentivize buyers. Depending on the state, the rebate may or may not be taxed accordingly. For example, purchasing a vehicle at $30,000 with a cash rebate of $2,000 will have sales tax calculated based on the original price of $30,000, not $28,000. Luckily, a good portion of states do not do this and don't tax cash rebates. They are Alaska, Arizona, Delaware, Iowa, Kansas, Kentucky, Louisiana, Massachusetts, Minnesota, Missouri, Montana, Nebraska, New Hampshire, Oklahoma, Oregon, Pennsylvania, Rhode Island, Texas, Utah, Vermont, and Wyoming.

Generally, rebates are only offered for new cars because of how uniform and consistent each new car is. While some used car dealers do offer cash rebates, this is rare due to the difficulty involved in determining the true value of the vehicle.

Fees

A car purchase comes with costs other than the purchase price, the majority of which are fees that can normally be rolled into the financing of the auto loan or paid upfront. However, car buyers with low credit scores might be forced into paying fees upfront. The following is a list of common fees associated with car purchases in the US.

If the fees are bundled into the auto loan, remember to check the box 'Include All Fees in Loan' in the calculator. If they are paid upfront instead, leave it unchecked. Should an auto dealer package any mysterious special charges into a car purchase, it would be wise to demand justification and thorough explanations for their inclusion.

Auto Loan Strategies

Preparation

Probably the most important strategy to get the best auto loan possible is to be well-prepared. This means determining what is affordable before heading to a dealership first. Knowing what kind of vehicle is desired will make it easier to research and find the best deals to suit your individual needs. Once a particular make and model is chosen, it is generally useful to have some typical going rates in mind to enable effective negotiations with a car salesman. This includes talking to more than one lender and getting quotes from several different places. Car dealers, like many businesses, want to make as much money as possible from a sale, but often, given enough negotiation, are willing to sell a car for significantly less than the price they initially offer. Getting a preapproval for an auto loan through direct lending can aid negotiations.

Credit

Credit, and to a lesser extent, income, generally determines approval for auto loans, whether through dealership financing or direct lending. In addition, borrowers with excellent credit will most likely receive lower interest rates, which will result in paying less for a car overall. Borrowers can improve their chances to negotiate the best deals by taking steps towards achieving better credit scores before taking out a loan to purchase a car.

Cash Back vs Low Interest

When purchasing a vehicle, many times auto manufacturers may offer either a cash vehicle rebate or a low-interest rate. A cash rebate instantly reduces the purchasing price of the car, but a lower rate can potentially result in savings in interest payments. The choice between the two will be different for everyone. For more information about or to do calculations involving this decision, please go to the Cash Back vs Low Interest Calculator.

Early Payoff

Paying off an auto loan earlier than usual not only shortens the length of the loan, but can also result in interest savings. However, some lenders have early payoff penalty or terms restricting early payoff. It is important to examine the details carefully before signing an auto loan contract.

Consider Other Options

Although the allure of a new car can be strong, buying a pre-owned car even if only a few years removed from new can usually result in significant savings; new cars depreciate as soon as they are driven off the lot, sometimes by more than 10% of their values; this is called off-the-lot depreciation, and is an alternative option for prospective car buyers to consider. People who just want a new car for the enjoyment of driving a new car may also consider a lease, which is, in essence, a long-term rental that normally costs less upfront than a full purchase. For more information about or to do calculations involving auto leases, please visit the Auto Lease Calculator. In some cases, a car might not even be needed! If possible, consider public transportation, carpool with other people, bike, or walk instead.

Buying a Car with Cash Instead

Although most car purchases are done with auto loans there are benefits to buying a car outright with cash.

There are a lot of benefits to paying with cash for a car purchase, but that doesn't mean everyone should do it. Situations exist where financing with an auto loan can make more sense to a car buyer, even if they have enough saved funds to purchase the car in a single payment. For example, if a very low interest rate auto loan is offered on a car purchase and there exist other opportunities to make greater investments with the funds, it might be more worthwhile to invest the money instead to receive a higher return. Also, a car buyer striving to achieve a higher credit score can choose the financing option, and never miss a single monthly payment on their new car in order to build their scores, which aids other areas of personal finance. It is up to each individual to determine which is the right decision.

Trade-in Value

Don't expect too much value when trading in old cars to dealerships as credit towards newer car purchases. Selling old cars privately and using the funds for a future car purchase tends to result in a more financially-desirable outcome.

In most of the states that collect sales tax on auto purchases (not all do), the sales tax collected is based on the difference between the new car and trade-in price. For a $25,000 new car purchase with a $10,000 trade-in value, the tax paid on the new purchase with an 8% tax rate is:

($25,000 - $10,000) × 8% = $1,200

Some states do not offer any sales tax reduction with trade-ins, including California, District of Columbia, Hawaii, Kentucky, Maryland, Michigan, Montana, and Virginia. This Auto Loan Calculator automatically adjusts the method used to calculate sales tax involving Trade-in Value based on the state provided.

Using the values from the example above, if the new car was purchased in a state without a sales tax reduction for trade-ins, the sales tax would be:

$25,000 × 8% = $2,000

This comes out to be an $800 difference which could be reason for people selling a car in these states to consider a private sale.