What affects your car loan payment?
Six numbers drive the payment: the price, any sales tax, your down payment, your trade-in value, the interest rate and the length of the loan. This calculator combines them, so you can see how each choice changes the monthly cost and the total.
The amount you borrow is the price plus sales tax, minus your down payment and trade-in. The payment is then worked out with the standard loan formula.
How to use this calculator
- Enter the car price and the sales tax or VAT rate, if any.
- Enter your down payment and the trade-in value of your old car.
- Enter the interest rate and choose the loan term in months.
- Press Calculate to see the monthly payment, the loan amount, the total interest and the total cost.
Short term or long term?
A longer term lowers the monthly payment, which is why 72-month and 84-month loans are popular. But you pay more interest, and because cars lose value quickly you can end up owing more than the car is worth.
Example: a 25,000 loan at 7% costs about 495 a month over 60 months with roughly 4,700 in interest. Stretching it to 72 months drops the payment to about 426 but adds nearly 1,000 more in interest.
Tips for a cheaper car loan
- Get a pre-approved offer from your bank or credit union before visiting the dealer, so you can compare financing.
- Compare the APR and the total cost, not only the monthly payment.
- Negotiate the car price first, then discuss financing.
- Be careful with add-ons rolled into the loan, because you pay interest on them too.
- Put down as much as you comfortably can to reduce the amount you borrow.
How the term changes the cost (25,000 loan at 7%)
| Term | Monthly payment | Total interest |
|---|---|---|
| 36 months | 772 | about 2,790 |
| 48 months | 599 | about 3,740 |
| 60 months | 495 | about 4,700 |
| 72 months | 426 | about 5,690 |
Frequently Asked Questions
How is a car loan payment calculated?
It uses the standard amortisation formula with the loan amount, the monthly interest rate and the number of months.
Does a trade-in reduce my loan?
Yes. The trade-in value counts toward the purchase, so you borrow less.
What term should I choose?
Choose the shortest term whose payment fits your budget. Longer terms cost more interest overall.
Is sales tax included?
You can enter a tax rate, and it is added to the price before the loan amount is calculated. Rules differ by region, so check yours.
Does this include insurance and fuel?
No. It only covers the loan. Budget for insurance, fuel and maintenance separately.
Is my data stored?
No. The calculation runs in your browser, so the numbers you enter are not sent to our server.