How to work out a car payment
- Enter the vehicle price and your down payment, including any trade-in value, as an amount or a percentage.
- Enter the APR from the dealer or bank and the term in months (36, 48, 60, 72 or 84 are typical).
- Read the monthly payment, total interest and payoff date. Add an extra monthly amount to see how much faster you could clear it.
Choosing a car loan
A 30,000 car with 3,000 down, financed at 7% APR for 60 months, costs 534.63 a month and about 5,078 in interest. Stretching the same loan to 84 months drops the payment to roughly 407 but raises the interest to over 7,200, and you may owe more than the car is worth for years because cars lose value quickly. A larger down payment and a shorter term reduce both risks.
Compare the APR, not only the monthly payment: dealers can lower the payment by lengthening the term. Get a pre-approval from your bank or credit union to compare with dealer financing, and check whether taxes, registration and fees are included in the amount financed. Add them to the price here if they are. Promotional 0% APR deals show the interest as zero; check whether taking one means losing a cash rebate. All numbers stay on your device.
FAQ
What is a good term for a car loan?
Many advisers suggest 48–60 months or less. Longer terms lower the payment but cost more interest and increase the risk of negative equity.
Should I include sales tax?
If the tax and fees are rolled into the loan, add them to the vehicle price so the payment is accurate.
How does a trade-in affect my payment?
It works like a down payment: enter its value (minus any amount still owed on it) in the down payment box.