Financing a vehicle spreads the purchase price over monthly payments, but interest adds to the true cost. This car loan calculator shows your payment, total interest, and what the vehicle actually costs over the loan term — with plain-language interpretation to help you decide.
How to use this calculator
- Enter the vehicle purchase price.
- Enter your planned down payment.
- Enter the annual interest rate and loan term in years.
- Review monthly payment, total interest, total cost, and the interpretation.
Formula
Loan amount equals vehicle price minus down payment. Monthly payment uses standard amortization: M = P × [r(1+r)^n] ÷ [(1+r)^n − 1]. Total interest is all payments minus the loan amount. Total cost is the vehicle price plus total interest.
Example
A $35,000 vehicle with a $5,000 down payment at 6.5% over 5 years results in a loan of $30,000, a monthly payment of about $587, roughly $5,220 in interest, and a total cost near $40,220.
Frequently asked questions
- What is a good interest rate for a car loan?
- Rates vary by credit score, lender, and new vs used vehicles. Compare dealer financing with bank and credit union offers. Lower rates and shorter terms reduce total interest.
- Does a larger down payment help?
- Yes. A larger down payment reduces the loan amount, which lowers both monthly payments and total interest paid over the life of the loan.
- Are taxes and fees included?
- No. This calculator covers principal and interest only. Sales tax, registration, documentation fees, and insurance are not included.