Utilize NerdWallet’s auto loan calculator to approximate your monthly car payment and overall loan expenses, accounting for vehicle cost, interest rate, down payment, sales tax, and additional fees.
Compare Auto Loans
Input your preferred loan details to view loans that are aligned with your preferences.
Estimate Your Monthly Car Loan Payment
Utilize this auto loan calculator to gauge your monthly car payment and total loan expenditure based on the provided information, including vehicle cost, interest rate, down payment, trade-in value, loan duration, sales tax rate, and registration fees.
Experiment with different inputs to observe how various factors influence your car payment and total interest outlay.
What You Need to Know About Car Financing
Understanding the basics of car loans can benefit those new to vehicle financing. Typically, individuals opt for auto loans since purchasing a car outright with cash isn’t feasible for most. Upon approval, the lender disburses a lump sum to cover the vehicle’s cost, and the buyer makes monthly payments until the loan is repaid in full.
Various components of a car loan, some within your control, contribute to your monthly expenses and overall loan cost. Our car loan calculator facilitates the exploration of different scenarios to help you plan your expenditures effectively.
» Interested in exploring options? Compare lenders to secure the most favorable auto financing.
How to Utilize the Auto Loan Calculator
Below is an explanation of the data you can input into this car loan calculator, some of which are mandatory and others optional.
Vehicle Price: Enter the anticipated purchase price of the car. For new cars, begin with the sticker price (MSRP), deduct any negotiated savings or rebates, and include additional expenses like optional features and destination fees.
Determining the sale price of used cars may require negotiation. For comparable vehicles, use online pricing guides or local classified ads.
Interest Rate: Several methods can help ascertain the applicable interest rate. If prequalified or preapproved, input the offered rate. Alternatively, use the current average interest rate corresponding to your credit score.
Refer to the table below, which presents Experian’s average car loan APRs by credit score (based on the VantageScore model) as a helpful reference:
[Include the table of Experian average car loan APRs by credit score here]
It’s essential to recognize that auto loan interest rates typically follow suit when the Federal Reserve raises the federal funds rate. The Fed rate hikes initiated in 2022 have resulted in auto loan interest rates reaching their highest levels in years. While some sources offer average auto loan interest rates updated monthly, providing more recent data, they often lack segmentation by credit score.
For instance, in May 2024, the automotive website Edmunds.com reported the average car loan interest rate for April 2024 as 7.2% APR for new car loans and 11.6% APR for used car loans. Meanwhile, data company Cox Automotive presented the volume-weighted average rate as 9.71% for new cars and 13.96% for used cars in its May 29, 2024 Auto Market Report. These rates from Cox Automotive are sales-weighted averages derived from information gathered by Dealertrack, a software utilized by auto dealerships.
When utilizing the auto loan calculator, consider the following factors:
Loan Term: Enter the length of time over which you intend to pay off the loan. Car loans typically come in 12-month increments, with standard terms of 24, 36, 48, 60, 72, or 84 months. According to Aim for No, it’s advisable to have more than a 60-month term, according to NerdWallet. While longer terms result in lower monthly payments, they also lead to significantly higher overall interest expenses.
Down Payment (Optional): Input the total cash amount you plan to allocate towards purchasing the car. While not all lenders necessitate a down payment, NerdWallet recommends putting down at least 20% of a new car’s purchase price or 10% for a used car. If this amount isn’t attainable, contribute as much as possible without depleting your savings or emergency funds. Any down payment reduces the financed amount and, consequently, the total loan cost.
Trade-in Value (Optional): Specify the trade-in value of your current vehicle, if applicable. Online appraisal sites can assist in determining this value. Ensure you assess the trade-in value rather than the retail price (the price at which the dealer sells the car). Alternatively, you can obtain cash purchase offers from online retailers like CarMax or Carvana to establish a baseline.
Amount Owed on Trade-in (Optional): If you still owe money on a loan for the vehicle you intend to trade in, input the remaining balance here. This is known as the payoff amount, which your lender can provide.
Looking to explore your options? Check out our roundups on new and used purchase loans and auto loan refinancing.
Additionally, while this auto loan calculator equips you with fundamental information for financing and purchasing a vehicle, consider trying out these other auto calculators:
Auto Loan Affordability Calculator: If your budget constraints limit your monthly car payment, ascertain the maximum amount you can allocate towards a vehicle. Our reverse auto loan calculator also provides this insight.
Auto Loan Amortization Calculator: Since auto loans operate on simple interest, the portion of your payment allocated to interest fluctuates monthly. Utilize this calculator to estimate the balance of your simple-interest auto loan at any stage during its term.
Auto Loan Refinancing Calculator: If you currently have an auto loan, compare it with other loan options to see if you could save money.
Frequently Asked Question
What is an auto loan calculator?
An auto loan calculator is a tool that helps individuals estimate their monthly car payments and total loan costs based on various factors such as vehicle price, interest rate, down payment, loan term, and other fees. It assists in budgeting and understanding the financial implications of taking out an auto loan.
How do I use an auto loan calculator?
To use an auto loan calculator, you typically input information such as the vehicle price, desired loan term, interest rate, down payment amount (if applicable), and any trade-in value. The calculator computes your estimated monthly payment and total loan cost based on the provided data.
What factors affect my auto loan payments?
Several factors influence auto loan payments, including the vehicle price, interest rate, loan term, down payment amount, and additional fees or taxes. Generally, a higher vehicle price, longer loan term, and higher interest rate result in higher monthly payments, while a larger down payment reduces the amount financed and lowers monthly payments.
Why should I use an auto loan calculator?
Using an auto loan calculator can help you understand the financial implications of taking out a car loan. It allows you to experiment with different scenarios, such as adjusting the loan term or down payment amount, to see how they affect your monthly payments and total loan cost. This information empowers you to make informed decisions about your auto financing options.
Where can I find an auto loan calculator?
Auto loan calculators are available on various financial websites, including those of banks, credit unions, and personal finance platforms like NerdWallet or Bankrate. Many car dealership websites offer loan calculators to help customers estimate payments before purchasing.
Conclusion
An auto loan calculator is valuable for anyone considering financing a vehicle. By providing estimates of monthly payments and total loan costs based on various input factors, such as vehicle price, interest rate, and loan term, these calculators empower individuals to make informed decisions about their auto financing options. Using an auto loan calculator allows users to explore different scenarios, understand the financial implications of their choices, and budget accordingly. Whether purchasing a new or used car or considering refinancing an existing loan, these calculators offer valuable insights into the affordability and feasibility of different financing options.