Car Loan Calculator
This car loan calculator answers the question behind every car purchase: what will it actually cost each month? Work out the monthly payment on a price, down payment, and APR; check how much car your income supports under the 20/4/10 rule; add a trade-in and your sales tax rate; see what an extra monthly payment saves; or compare 60 months against 72. Every figure shows its math, tax rates are entered by you (never assumed), and nothing here is a lender offer or buying advice — it is loan math for planning.
Each mode asks only for the inputs it needs.
The selling price before down payment, trade-in, or tax.
Cash you pay up front. The 20/4/10 rule suggests 20% of the price.
Annual percentage rate from your loan offer or pre-approval. Enter 0 for a 0% APR offer.
The 20/4/10 rule suggests financing for no more than 48 months.
Monthly payment
386.66
- Amount financed$25000.00 − $5000.00 down.
- 20,000
- Total interest$386.66 × 60 − $20000.00.
- 3,199.36
- Total of payments
- 23,199.36
- Total cost (down + payments)
- 28,199.36
How it was calculated
- Amount financed: $25000.00 − $5000.00 down = $20000.00.
- Monthly payment: M = P·r(1+r)^n ÷ ((1+r)^n − 1) with P = $20000.00, r = 6% ÷ 12 = 0.500000, n = 60 → $386.66.
- Total interest: $386.66 × 60 − $20000.00 = $3199.36.
- Total cost: $5000.00 down + $23199.36 in payments = $28199.36.
How it works
Monthly payment: M = P·r(1+r)^n ÷ ((1+r)^n − 1), where P is the amount financed, r is the monthly rate (APR ÷ 12), and n is the term in months. For the worked example — $25,000 at 6% APR over 60 months — r = 0.005 and n = 60, so M = 25,000 × 0.005 × 1.005^60 ÷ (1.005^60 − 1) = $483.32 a month, and total interest is $483.32 × 60 − $25,000 = $3,999.20. A 0% APR loan is simpler: the payment is just P ÷ n, with no interest at all.
Affordability inverts the same formula: P = M × ((1+r)^n − 1) ÷ (r(1+r)^n). Under the 20/4/10 rule the max monthly payment is 10% of gross monthly income, so on $6,000 a month the cap is $600 — and at 6% APR over 48 months that supports a loan of $25,548.19, or a $30,548.19 car with $5,000 down. The rule itself is a budgeting guideline (20% down, a term of 4 years or less, car costs within 10% of gross income), not a lender requirement.
Trade-in mode taxes (price − trade-in): on a $30,000 car with an $8,000 trade-in at 7% tax, the taxable amount is $22,000, the tax is $1,540, and with $5,000 down the amount financed is $30,000 − $5,000 − $8,000 + $1,540 = $18,540. Some states tax the full price instead — check your state, because that changes the financed amount.
Extra payments are applied month by month: each month the interest is balance × r, the payment (regular + extra) covers that interest first, and the rest cuts the balance. On the $25,000 example, $100 extra a month pays the loan off in 49 months instead of 60 and cuts total interest from $3,999.20 to $3,206.27 — a saving of $792.93. Term comparison just runs the same loan twice: 72 months drops the payment to $414.32 but raises total interest to $4,831.20, which is $832.00 more than the 60-month loan.
Worked examples
$25,000 at 6% APR for 60 months: $483.32 a month
Borrow $25,000 at 6% APR over 60 months: r = 6% ÷ 12 = 0.005, so the payment is 25,000 × 0.005 × 1.005^60 ÷ (1.005^60 − 1) = $483.32 a month. Over the loan you pay $483.32 × 60 = $28,999.20 in total, of which $28,999.20 − $25,000 = $3,999.20 is interest. With a $5,000 down payment instead, the financed amount falls to $20,000 and the payment to $386.66 a month.
60 vs 72 months on the same $25,000 loan
At 6% APR, the same $25,000 loan costs $483.32 a month over 60 months ($3,999.20 interest) but only $414.32 a month over 72 months ($4,831.20 interest). Stretching the term saves $69.00 a month and adds $832.00 in interest — and you keep paying for a full extra year, which is also the year the car is oldest and most likely to need repairs. Use compare mode with your own price, down payment, and APR for your numbers.
How to measure
- Get the APR from the offer itself — a pre-approval letter or the lender's Truth in Lending disclosure — not from an advertisement. Advertised rates are usually for the best credit tier; your approved rate is the one that decides the payment.
- Use the out-the-door price, not the sticker price, when you can: the number you actually finance includes the selling price plus any dealer additions, minus down payment and trade-in. If you only have the sticker price, say so in your notes and re-run once the real price is known.
- Value the trade-in from more than one dealer quote, and get the quotes in writing before you negotiate the new car's price. A trade-in figure that moves by $1,000 moves the financed amount — and the tax in trade-in mode — by the same $1,000.
- Read the term in months off the offer, and check whether the offer's term matches the 20/4/10 guideline of 48 months or less. A longer term is not automatically wrong, but compare mode shows exactly what it costs in interest before you accept it.
- Before relying on extra-payment savings, ask the lender whether extra payments go to principal and whether any prepayment penalty applies. This tool assumes extra money cuts principal with no penalty; a loan that holds extra payments for future due dates will not pay off early.
Assumptions & limitations
Planning estimate
- Fixed APR with monthly compounding and end-of-month payments. Variable-rate loans, biweekly schedules, and loans with a balloon payment at the end are not modeled — a biweekly plan pays off faster than the same monthly payment shown here.
- Trade-in mode computes sales tax on (price − trade-in). Many states allow that trade-in credit, but some tax the full price, and local rates vary — enter your own rate (no rate is assumed) and confirm your state's treatment before signing.
- Dealer, documentation, title, and registration fees are NOT included, and neither are insurance, fuel, or maintenance. The payment here is the loan payment only; the full monthly cost of owning the car is higher.
- Extra payments are assumed to reduce principal immediately with no prepayment penalty. If your lender applies extra money differently, the months and interest saved will not match — ask before you overpay.
- All figures are estimates for planning a purchase, not a lender offer, a pre-approval, or financial advice. Measurely does not provide loans, recommend lenders, or advise whether to buy a car.
Frequently asked questions
A budgeting guideline, not a lender rule: put 20% down, finance for no more than 4 years (48 months), and keep total monthly car costs within 10% of your gross monthly income. On $6,000 a month gross income, that means a $600 monthly payment cap — at 6% APR over 48 months with $5,000 down, the most car that supports is about $30,548. Affordability mode runs exactly this math with your income, down payment, APR, and term, and warns you when your down payment is below 20% of the max price.
More than most people expect, because extra money cuts principal directly. On the $25,000 example at 6% APR over 60 months, adding $100 a month pays the loan off in 49 months instead of 60 and cuts total interest from $3,999.20 to $3,206.27 — a saving of $792.93 and 11 months sooner. Use extra-payment mode with your own loan: the saving grows with the APR and the loan size, and shrinks as the loan nears payoff.
In this tool, yes — trade-in mode taxes (price − trade-in), which is the treatment many states use: on a $30,000 car with an $8,000 trade-in at 7%, the tax is $22,000 × 7% = $1,540. But some states tax the full price, and rates and rules vary by state and county, so confirm your state's treatment and enter your own rate. No tax rate is assumed or filled in for you.
It depends what you value. On a $25,000 loan at 6% APR, 72 months drops the payment from $483.32 to $414.32 a month — $69.00 less — but adds $832.00 in total interest ($4,831.20 vs $3,999.20) and keeps you paying for an extra year, when the car is older and repair bills are likelier. A longer term also raises the risk of owing more than the car is worth. Compare mode shows both sides with your own numbers so the trade-off is explicit.
Everything beyond the loan itself: dealer and documentation fees, title and registration, insurance, fuel, and maintenance are all excluded, and the payment assumes a fixed APR with no balloon payment at the end. The result is the loan payment for planning — the full monthly cost of owning the car is higher, and the figure is an estimate, not a lender offer.