Car Loan Calculator
A $30,000 car loan at 7% over 60 months costs $594 a month and $5,642 in total interest, so the car really costs $35,642 before tax, insurance and fuel. Stretching the same loan to 84 months drops the payment to $453 but raises total interest to $8,034 — nearly double the shorter-term cost.
The monthly payment is the smallest number in the deal. The total interest is the one that hurts.
Read the sticker price as two numbers. $30,000 financed at 7% for 60 months costs $594 a month — and $5,642 in interest on top of the price. The payment is what you feel each month; the interest is what you actually pay for the car.
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How This Calculator Works
A car loan is a standard amortizing loan: the financed amount is the price minus your down payment and any trade-in credit, and every payment splits between interest and principal on a declining balance.
Early payments are mostly interest because the balance is largest then. By the final year the split has flipped — which is why extra principal early saves far more interest than the same overpayment late.
M = P × r(1+r)n / ((1+r)n − 1) — P = price − down payment − trade-in
Worked example
Using the defaults — a $35,000 car with a $5,000 down payment at 7% APR for 60 months:
The financed amount is $35,000 − $5,000 = $30,000. Every dollar you put down is a dollar that never accrues interest, which is why the down payment is the cheapest money in the deal.
At 7% APR the monthly rate is 0.5833%. The amortization formula gives $594.04 a month. Sixty payments of $594 total $35,642.
Total interest is $35,642 − $30,000 = $5,642. That is 18.8% of the amount financed — the real cost of borrowing, which the dealer quote shows only if you ask.
The calculator above returns $594.04 for these inputs. Sales tax, registration and dealer fees are excluded; most states tax the price after trade-in credit, but rules vary.
The same $30,000 loan across terms
A longer term buys a lower payment and sells you years of interest. The payment barely changes from 72 to 84 months; the interest keeps climbing.
| Term | Monthly payment | Total interest | Total paid |
|---|---|---|---|
| 36 months | $926 | $3,347 | $33,347 |
| 48 months | $718 | $4,483 | $34,483 |
| 60 months (default) | $594 | $5,642 | $35,642 |
| 72 months | $511 | $6,826 | $36,826 |
| 84 months | $453 | $8,034 | $38,034 |
Interest grows faster than the payment falls because the balance outruns the principal early in long terms. An 84-month loan on a depreciating asset also risks negative equity for years — owing more than the car is worth.
Common mistakes with this calculation
- Shopping the payment instead of the price. Dealers can hit any monthly target by stretching the term. Negotiate the vehicle price and the APR separately, then let the term fall out of the arithmetic.
- Taking dealer financing without a benchmark. Get pre-approved by your bank or a credit union first. The dealer then has to beat a written offer instead of setting the rate unchallenged.
- Rolling negative equity into the next loan. Rolling $4,000 of the old loan into a new one means paying interest on a car you no longer own.
- Ignoring insurance and gap coverage. A $35,000 car can cost $150+ a month to insure, and a loan longer than the depreciation curve makes gap insurance worth pricing.
When this calculator does not apply
- The calculator excludes sales tax, title, registration and dealer fees, which typically add 5-10% to the amount you actually finance.
- It assumes a fixed APR for the whole term; promotional or variable rates change the payment.
- It does not model prepayment penalties or the effect of paying early (most US auto loans can be paid off early without penalty, but check the contract).
- Insurance, fuel and maintenance are outside the loan and outside this calculator.
- Trade-in value is treated as cash off the price; states differ on whether tax applies before or after that credit.
Frequently Asked Questions
How much should I put down on a car?
At least 20% is the classic rule, because cars depreciate fastest in the first two years. A 20% down payment on a $35,000 car means you never owe more than the car is worth, which protects you if it is written off early.
Is a longer term with a lower payment better?
Rarely. An 84-month term at 7% on $30,000 costs $8,034 in interest versus $5,642 over 60 months, and the car loses value faster than the balance falls. Choose the shortest term whose payment leaves room in the budget.
What APR should I expect?
It depends on your credit tier, the term, and whether the car is new or used. Check the Federal Reserve consumer credit data and get a real pre-approval; a written quote from your own bank is the honest baseline.
Does paying extra principal help?
Yes, and early extra payments help most because they remove balance that would otherwise accrue interest for the longest time. Confirm the loan applies extra payments to principal rather than to future installments.
Sources & Methodology
This calculator uses standard financial formulas. See our methodology page for the full derivation.
- Auto Loans Consumer Financial Protection Bureau
- Consumer Credit (G.19) Federal Reserve
- Automotive Financing Federal Trade Commission
Last reviewed .
Key takeaways
- $30,000 at 7% over 60 months: $594 a month, $5,642 total interest.
- The down payment is the cheapest money in the deal — it never accrues interest.
- Stretching 60 to 84 months nearly doubles the interest for a payment saving of $141.
- Get a written pre-approval before visiting the dealership.
- Extra principal early in the loan saves the most interest.