Auto Loan Calculator

How Auto Loan Payments Work

Your monthly payment depends on four things: vehicle price, down payment, interest rate, and loan term.

The amortization formula

Monthly Payment = P × r ÷ [1 − (1 + r)⁻ⁿ]

Where P = loan principal (price minus down payment), r = monthly interest rate (annual ÷ 12), n = total number of months.

Step-by-step

1. Subtract your down payment from the vehicle price to get the principal.
2. Convert the annual rate to monthly: divide by 12, then by 100.
3. Apply the formula above to get the monthly payment.
4. Total cost = monthly payment × months. Total interest = total cost − principal.

Worked example

,000 car, ,000 down, 5% APR, 60 months. Principal = ,000. Monthly rate = 0.00417. Payment ≈ 1.78/month. Total = ,307. Interest = ,307.

Tips

Shorter terms mean higher payments but less total interest. Even a 1% rate difference can save thousands over 5 years. A larger down payment reduces both monthly cost and total interest.