Home / Finance / Car Loan Calculator
Car Loan Calculator
Calculate your auto loan monthly payment and total cost.
Loan Details
Can You Actually Afford This Car?
Monthly payment fits your budget? Cool. But that's not the full story. $400/month payment on a $25k car becomes $500+ after insurance, gas, and maintenance. Most people only look at the payment. Don't be most people.
💡 Real Talk from David Chen, CFA
Dealerships love showing you the monthly payment, not the total cost. $400/month for 7 years = $33,600. Same car, 5 years = $24,000. That extra 2 years costs you almost $10k in interest. Always negotiate the price, not the payment.
The Real Cost Breakdown
$30k car at 7% for 5 years:
- Monthly payment: $594
- Total interest: $5,642
- Insurance: ~$150/month ($1,800/year)
- Gas: ~$200/month
- Maintenance: ~$100/month average
- Real monthly cost: ~$1,044
Can you actually afford $1k/month on a car? Be honest.
⚠️ Common Mistake: 72+ Month Loans
"Only $350/month!" for 7 years means you're still paying off a worthless car long after it's broken down. Most car loans should be 3-5 years max. If you can't afford the payment on a 5-year loan, you can't afford the car. Buy cheaper.
Dealer Tricks to Watch
"What payment can you afford?" - They're trying to lock you into monthly thinking. Answer: "I care about the total price, not the payment."
"Let me talk to my manager." - Theater. The "manager" approves whatever they were gonna approve anyway. Don't fall for the pressure.
"This deal is only good today." - It's not. Walk out. They'll call you tomorrow with a better offer.
Extended warranties and add-ons - Pure profit for them. Say no to everything after you've agreed on the car price.
New vs Used: The Math
$40k new car: Loses $8k in value the second you drive off the lot. Worth $20k after 5 years.
$20k used car (3 years old): Someone else ate the depreciation. Worth $12k after 5 years.
Same car. You saved $28k total by buying used. "But new cars have warranties!" Cool, you paid $28k for peace of mind.
Down Payment Strategy
Put down 20% minimum. No down payment = underwater immediately. Car worth $25k, you owe $30k. Total it in month 2? Insurance pays $25k, you still owe the bank $5k.
Also, bigger down payment = lower monthly payment + less interest. $5k down saves you $1,200+ in interest over 5 years.
Interest Rate Reality Check
- Excellent credit (750+): 4-6% APR
- Good credit (700-749): 6-9% APR
- Fair credit (650-699): 10-15% APR
- Poor credit (\u003c650): 15-25% APR (ouch)
That $25k car at 20% for 5 years? You're paying $16,200 in interest alone. Fix your credit first, then buy the car.
The 20/4/10 Rule
Old but solid rule:
- 20% down payment
- 4 year loan max
- 10% of your monthly income for all car costs
Make $5k/month? Car costs (payment + insurance + gas + maintenance) should be under $500/month. Adjust expectations accordingly.
Reviewed by David Chen, CFA
Chartered Financial Analyst
David helps people avoid getting screwed by car dealerships.
Frequently Asked Questions
What's a good monthly car payment?
Follow the 20/4/10 rule: 20% down, 4-year loan max, and total car costs (payment + insurance + gas + maintenance) under 10% of your monthly income. Make $5k/month? Keep it under $500 total. Monthly payment alone isn't the full picture.
Should I finance a car for 72 months?
No. You'll pay way more in interest and be stuck with a depreciating asset for 6 years. If you can't afford a 5-year loan payment, you can't afford the car. Longer loans = more interest + you're paying for a broken car.
How much should I put down on a car?
Minimum 20% to avoid being underwater. $0 down = you owe more than it's worth from day 1. Total it in month 2? Insurance pays market value, you still owe the bank the difference. Plus bigger down payment = less interest over time.