Car Payment Calculator
Estimate your monthly car payment, total interest paid, and true cost of vehicle ownership. Compare loan terms and check if a car fits your budget.
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Affordability & Cost
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11.5%
Manageable
Financial experts recommend keeping your car payment below 10-15% of your monthly income.
Monthly Cost Breakdown
See how this car payment fits your budget
Your estimated payment is $573/month. See how it fits alongside your income, rent, savings, and other expenses in a complete financial simulation.
Try the Full SimulatorHow Car Loan Payments Are Calculated
Car loan payments are calculated using an amortization formula. The loan amount is determined by subtracting your down payment and trade-in value from the vehicle price. Then, based on the interest rate (APR) and loan term, a fixed monthly payment is computed that will fully repay the loan by the end of the term.
The formula is: M = P[r(1+r)^n] / [(1+r)^n - 1], where P is the loan principal, r is the monthly interest rate (annual rate divided by 12), and n is the number of monthly payments. Like mortgages, early payments are mostly interest, and later payments are mostly principal.
New vs Used Car Financing
New Car
- Lower interest rates (3-7% for good credit)
- Rapid depreciation — 20-30% in first year
- Full manufacturer warranty
- Latest safety features and technology
- 60% value loss over five years
Used Car (2-4 years)
- Higher rates (5-10%+) but lower price
- Steepest depreciation already occurred
- CPO options offer reliability + value
- Lower insurance premiums
- Better overall value proposition
How to Get the Best Auto Loan Rate
Check your credit score first.
Your credit score is the single biggest factor in your interest rate. Scores above 740 qualify for the best rates. If your score is below 670, consider improving it before financing a vehicle.
Get pre-approved.
Apply for pre-approval from your bank, credit union, and at least one online lender before visiting dealers. Credit unions often offer the most competitive rates.
Keep the loan term short.
Shorter terms (36-48 months) usually come with lower rates than longer terms (72-84 months). Plus, you will pay far less in total interest.
Make a substantial down payment.
Putting 20% or more down reduces the lender's risk and can qualify you for a better rate. It also means you are less likely to be underwater on the loan.
Negotiate the price separately from financing.
Agree on the vehicle price first, then discuss financing. Dealers sometimes inflate the price to make a low monthly payment look attractive while extending the term.
The True Cost of Car Ownership
Your car payment is just one part of vehicle ownership costs. A comprehensive budget should include insurance ($100-$200/month), fuel ($125-$250/month), maintenance and repairs ($40-$100/month), registration and taxes, and depreciation. For a $35,000 new car, the total cost of ownership over 5 years can exceed $50,000 — well above the purchase price alone.
Insurance: $100-$200/month depending on coverage and driving record
Fuel: $125-$250/month depending on vehicle efficiency and commute
Maintenance and repairs: $40-$100/month averaged over ownership
Registration, taxes, and inspection fees vary by state
Depreciation: the biggest hidden cost, especially for new vehicles
To keep transportation costs manageable, financial advisors recommend the 20/4/10 rule: 20% down payment, no more than a 4-year loan, and total transportation costs under 10% of gross income. If a car does not meet this test, consider a less expensive vehicle or saving for a larger down payment.
See How Your Car Payment Fits Into Your Complete Budget
This calculator shows your monthly car payment. Trajectoryy's full simulator shows how that payment fits alongside your income, rent, savings, investments, and more — month by month for years into the future.
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