Calculate monthly car payment and total interest.
The total purchase price of the car, new or used.
Enter any down payment or trade-in value to reduce the loan amount.
Your APR from the dealer or bank. Pre-approval gives you negotiating power.
Common terms: 36, 48, 60, or 72 months. Shorter = higher payment but less total interest.
See monthly payment, total interest cost, and total amount paid over the life of the loan.
Same amortization formula as a mortgage. P = loan amount (price minus down payment), r = monthly rate, n = number of monthly payments.
The debt avalanche method (highest interest first) saves more money, while snowball (smallest balance first) gives faster wins.
Even $50 extra per month toward your loan principal can shave years off your payoff timeline.
The 20/4/10 rule: 20% down payment, 4-year loan max, total car costs (payment + insurance + gas + maintenance) under 10% of gross monthly income. On $5,000/month gross income, keep total car costs under $500/month. A common mistake is only looking at the monthly payment — a 72-month loan has lower payments but costs thousands more in interest.
For new cars in 2026: Excellent credit (750+): 5.0-6.5%. Good credit (700-749): 6.5-8.5%. Fair credit (650-699): 8.5-12%. Poor credit (below 650): 12-18%+. Used car rates are typically 1-2% higher. Credit unions often offer 0.5-1% lower rates than banks or dealer financing. Always get pre-approved before visiting the dealer to have negotiating leverage.
Longer terms (60-72 months) have lower monthly payments but cost significantly more overall. Example on $30,000 at 6.5%: 48 months = $712/month, $4,170 total interest. 60 months = $587/month, $5,210 total interest. 72 months = $504/month, $6,291 total interest. Longer terms also risk being 'underwater' — owing more than the car is worth — since cars depreciate 15-20% per year in the first 3 years.
Pay cash if: you have the funds without depleting your emergency fund, and the loan rate exceeds your investment returns. Finance if: loan rate is low (under 5%) and you can earn more by investing the cash. In 2026's rate environment, paying cash often wins because auto loan rates (5-8%+) exceed typical savings returns (4-5%). Never drain your emergency fund to avoid a car payment.
Total cost of ownership goes far beyond the monthly payment. Average annual costs: Insurance $1,800 ($150/month), Gas $2,400 ($200/month), Maintenance/repairs $1,200 ($100/month), Registration/taxes $500 ($42/month), Depreciation $3,500 ($292/month). A $35,000 car with a $550 payment really costs about $1,334/month when you factor in everything.