Car Payment Calculator: Monthly Auto Loan Payment

Worked examples

$25,000 at 6% for 60 months

With no down payment or tax, the loan is $25,000. At 6% APR over 60 months the payment is about $483.32 per month, with roughly $3,999 in total interest.

Same car with a $5,000 down payment

A $5,000 down payment cuts the loan to $20,000. At 6% APR over 60 months the payment drops to about $386.66, saving around $97 every month.

Adding a trade-in

A $25,000 car with a $3,000 trade-in and no down payment finances $22,000. At 6% APR over 60 months that is about $425.32 per month.

Shorter term, higher payment

The same $25,000 loan at 6% over 36 months is about $760.55 per month but only about $2,380 in total interest, less than half the interest of the 60-month plan.

How the car payment calculator works

A car loan is repaid in equal monthly installments over a fixed number of months. Each payment is the same size, but the split between interest and principal changes over time. This calculator takes your vehicle price, down payment, trade-in, sales tax, APR, and term, then returns the monthly payment, the total interest, and the full cost of the loan.

Building the loan amount

The amount you actually finance is smaller than the sticker price. It starts from the price, adds sales tax, then subtracts anything you pay up front:

Loan amount = price + sales tax − down payment − trade-in value
Sales tax = price × tax rate

For example, a $25,000 car with no tax, no down payment, and no trade-in finances the full $25,000. Add a $5,000 down payment and you finance $20,000 instead. If any of these values would push the loan below zero, the calculator floors it at zero.

The amortization formula

Once the loan amount is set, the monthly payment comes from the standard amortization formula. Let P be the loan amount, r the monthly interest rate (the APR divided by 12 and by 100), and n the number of monthly payments:

When r is greater than 0: M = P × r ÷ (1 − (1 + r)^−n)
When r is 0 (a 0% deal): M = P ÷ n

The monthly rate matters because auto loans compound monthly. A 6% APR is a 0.5% monthly rate (6 ÷ 100 ÷ 12 = 0.005), not 6% per month.

How term length trades payment for interest

A longer term spreads the balance over more months, so the monthly payment falls, but you pay interest for more of those months, so the total interest rises. A shorter term does the opposite: a higher monthly payment, less interest overall.

Using the same $25,000 loan at 6% APR:

36 months: about $760.55 per month, roughly $2,380 total interest
60 months: about $483.32 per month, roughly $3,999 total interest
72 months: about $414.32 per month, roughly $4,831 total interest

Stretching from 36 to 72 months cuts the payment by nearly half but more than doubles the interest you pay. Pick the shortest term whose payment you can comfortably afford.

A fully worked example

Take a $25,000 loan (no tax, no down payment, no trade-in) at 6% APR over 60 months:

Monthly rate: r = 6 ÷ 100 ÷ 12 = 0.005
Payments: n = 60
(1 + r)^−n = 1.005^−60 ≈ 0.741372
1 − 0.741372 = 0.258628
M = 25,000 × 0.005 ÷ 0.258628 ≈ 483.32

So the payment is about $483.32 per month. Over 60 months that is 483.32 × 60 ≈ $28,999, which means about $3,999 in interest above the $25,000 borrowed. (Add sales tax, a down payment, or a trade-in and the loan amount, and therefore the payment, shifts accordingly.)

What the estimate leaves out

This calculator covers the loan math and optional sales tax, but a real deal has more moving parts. It does not include documentation and dealer fees, registration and title costs, extended warranties or add-ons, gap insurance, or your regular auto insurance. Promotional or manufacturer financing may also change the effective rate.

These figures are estimates for planning and budgeting only, not financial advice. Your actual APR, payment, and total cost depend on your credit, the lender, and local taxes and fees, so confirm the final numbers with your lender before you sign.

Frequently asked questions

How is the monthly car payment calculated?

It uses the standard amortization formula. With a loan amount P, a monthly rate r (the APR divided by 12), and n monthly payments, the payment is M = P × r ÷ (1 − (1 + r)^−n). Each payment covers that month's interest first, and the rest reduces the balance, so early payments are mostly interest and later ones are mostly principal.

How do APR and loan term change my payment?

A higher APR raises both the monthly payment and the total interest. A longer term lowers the monthly payment because you spread the balance over more months, but you pay interest for longer, so the total interest goes up. A $25,000 loan at 6% is about $483/month over 60 months but about $761/month over 36 months, and the shorter term costs far less interest overall.

Does this calculator include tax, fees, and insurance?

It can add sales tax as a percentage of the vehicle price, which is common in many states. It does not include documentation fees, registration, title, dealer add-ons, or insurance. Add those separately, since they vary by state and dealer, to see your true out-the-door cost.

How do a down payment or trade-in help?

Both reduce the amount you finance. The loan is the price plus tax minus your down payment and trade-in value, so every dollar down is a dollar you are not borrowing or paying interest on. A $5,000 down payment on a $25,000 car at 6% over 60 months lowers the payment by about $97 a month.

Is this financial advice?

No. This is an estimate for planning only and is not financial advice. Actual terms depend on your credit, the lender, taxes, and fees. Confirm the exact APR, payment, and total cost with your lender before signing.