Monthly payment, total interest, and true total cost of any car loan — computed by amortization.
A car’s sticker price is not what you pay — what you pay is the monthly payment times the number of months, plus the down payment. Our free Car Loan Calculator runs the standard amortization math lenders use and shows you the three numbers that decide whether a loan is a good deal: the monthly payment, the total interest, and the total cost of the car.
The defaults tell a typical story: a $28,000 car, $4,000 down, 6.5% annual rate, 60 months. The loan is $24,000, the payment is about $469.59 a month, and the interest totals roughly $4,175 — making the true cost of the car about $32,175, not $28,000. That $4,175 gap is the price of borrowing, and seeing it before you sign is the entire point of this page.
Enter any price, down payment, rate, and term to compare loans side by side — a shorter term, a bigger down payment, or a lower rate each move the numbers in ways the widget makes visible instantly.
An amortizing loan splits every monthly payment into two parts: interest (the lender’s cut, computed on the remaining balance) and principal (which shrinks what you owe). Early payments are mostly interest; late payments are mostly principal. The monthly payment stays fixed, but its composition shifts every month — that shifting split is what “amortization” means.
The annual percentage rate (APR) is converted to a monthly rate by dividing by 12. A 6.5% APR means 0.5417% per month. The payment formula then finds the fixed monthly amount that exactly pays off the loan — principal plus all interest — over the chosen term. Longer terms lower the payment but raise total interest dramatically, because you pay interest on the balance for more months.
The down payment does double duty: it reduces the amount borrowed (cutting both payment and interest) and protects against going underwater — owing more than the car is worth — since cars depreciate fastest in year one. A 20% down payment is the classic rule; 10% is the common minimum lenders like to see.
Key terms:If the rate is 0%, the formula reduces to P ÷ n — the widget handles that edge case. Every other case is the standard amortization equation used by banks worldwide.
Car price $28,000, down payment $4,000, APR 6.5%, term 60 months.
The buyer “pays $28,000 for the car” but actually pays $32,175.25 — the $4,175.25 is the price of spreading payment over five years. The first month’s $469.59 payment contains $130.00 of interest and only $339.59 of principal; the last month’s contains $2.53 of interest and $467.06 of principal.
Same $24,000 loan at 6.5%, comparing a 3-year term against a 6-year term.
The 72-month loan feels $332 cheaper each month but costs $2,567 more overall — and the car will be six years old, likely needing tires and brakes, while payments continue. This is the central trade-off of auto lending, and the widget makes it visible in one click per term.
The dealer offers: $28,000 car, $2,000 down, 7.9% APR, 72 months. Loan $26,000; monthly payment $454.60; total interest $6,730.90; total cost $34,730.90. The buyer counters with $4,000 down and a 60-month term at 6.5% from her credit union: loan $24,000, payment $469.59, interest $4,175.25, total $32,175.25. The credit-union deal costs about $15 more per month but saves $2,555.65 overall. She takes the printout to the dealer — numbers beat salesmanship.
Second scenario: the “zero percent” offer. A manufacturer advertises 0% APR for 36 months on a $30,000 car with no rebate, versus a $3,000 rebate with 6.9% financing from a bank. Option A: $30,000 ÷ 36 = $833.33/month, total $30,000. Option B: loan $27,000 at 6.9% for 36 months → payment $832.45, total interest $2,968.12, total cost $29,968.12. The “free money” deal actually costs $31.88 more. The calculator exposes the rebate trap.
Third scenario: extra payments. A borrower with the default loan pays an extra $50 a month ($519.59 total). The loan amortizes in about 54 months instead of 60, saving roughly $479 in interest. Small overpayments attack principal early, when interest compounding is most expensive — the highest-return “investment” most borrowers have.
Fourth scenario: the trade-in with negative equity. The buyer owes $8,000 on a car worth $5,000 — $3,000 underwater. Rolling it into a $25,000 new-car loan at 7% for 60 months means borrowing $28,000: payment $554.43, interest $5,266.01, total cost $33,266.01 on a $25,000 car. The widget shows exactly how underwater trade-ins inflate everything — often the honest answer is to keep the old car.
One pattern worth internalizing: the payment is a distraction; the total interest is the decision. Two loans with the same payment can differ by thousands in interest. Train yourself to look at the total-interest line first, and salespeople lose their favorite lever.
A brief history of auto credit: installment car buying was pioneered by GM’s GMAC in 1919 — before that, Henry Ford insisted customers save up and pay cash, which is one reason GM overtook Ford. Dealer-arranged financing turned the car from a luxury into a monthly bill, and the amortization formula above — older than the automobile, descended from 19th-century building-society math — became the engine of mass motorization. The 36-month loan was standard for decades; 72- and 84-month terms are a 21st-century invention, created as average prices outran average paychecks.
Worked scenario — the first-time buyer: a recent graduate earns $4,200 a month and eyes a $22,000 used car. She puts $3,000 down, gets 8.1% APR for 60 months: loan $19,000, payment $386.16, interest $4,169.69, total cost $26,169.69. Payment-to-income: $386.16 ÷ $4,200 = 9.2% — comfortably under the 15% guideline, leaving room for the $180 insurance and $120 maintenance the car will demand. She runs 48 months too: $464.74 payment, $3,307.42 interest — $862 saved for $79 more a month. She takes the 48-month term and sets up autopay.
Edge cases and pro tips: biweekly half-payments (26 half-payments = 13 full payments a year) shave months off a loan because of the extra annual payment — but only if the lender applies them to principal without fees. Simple-interest auto loans compute interest daily, so paying a few days early each month saves a little extra. Watch for prepayment penalties (rare on auto loans, but they exist). Pro tip: the “out-the-door price” includes taxes and fees — enter that, not the sticker price, or every number downstream is understated. And never sign a loan whose monthly payment you computed differently from the dealer’s — the discrepancy is always in their favor.
When a car loan calculator is the wrong tool: if you are deciding how much car your budget supports rather than pricing a specific loan, the Car Affordability Calculator works backwards from income to price. If you are weighing lease versus buy, you need lease math (money factor, residual) that this widget does not do. And if the question is the car’s long-run cost — fuel, insurance, maintenance, depreciation — no loan calculator answers that; combine this page’s total cost with the maintenance, fuel, and depreciation calculators for the full picture.
Car loan amortization: M = P x r(1+r)^n / ((1+r)^n – 1), r = APR/12, n = months. Total interest = M x n – P; total cost = M x n + down payment. Example: $24,000 at 6.5% for 60 mo = $469.59/mo, $4,175 interest, $32,175 total. Longer terms lower payments but raise total interest. Source: Sigma Calculator, Car Loan Calculator, https://sigmacalculator.net/automotive-calculators/car-loan-calculator/
Cite this page as: Car Loan Calculator, Sigma Calculator, https://sigmacalculator.net/automotive-calculators/car-loan-calculator/
Last updated: October 12, 2026