What is a good interest rate for an auto loan?

As of 2025, average new car loan rates are 6–8% for excellent credit and 10–15% for fair credit. Used car loans typically run 1–3% higher. Credit unions often offer the most competitive auto loan rates.

How much should I put down on a car?

Financial advisors recommend 20% down on a new car and 10% on a used car. A larger down payment reduces your monthly payment, lowers the interest you pay, and helps avoid being underwater on the loan (owing more than the car is worth).

What is a good loan term for a car?

48–60 months (4–5 years) is generally considered ideal. Longer terms (72–84 months) lower payments but cost more in interest and increase the risk of being upside-down on the loan as the car depreciates.

Should I finance through a dealer or my bank?

Get pre-approved by your bank or credit union before going to the dealership. This gives you a baseline rate to compare against dealer financing. Dealers sometimes mark up rates for profit; having pre-approval gives you negotiating leverage.

What is the total cost of a car loan?

The total cost is the sum of all payments plus your down payment. For example, a $30,000 car with $3,000 down, 7% rate, 60-month term: monthly payment = $534, total payments = $32,040, total interest = $5,040, total cost = $35,040.

Auto Loan Calculator

Estimate your monthly car payment and total loan cost. Includes down payment and trade-in value.

Vehicle Price ($)

Down Payment ($)

Trade-In Value ($)

Annual Interest Rate (%)

Loan Term

Auto Loan Estimate

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Loan Amount Financed—

Total Interest Paid—

Total Loan Cost—

Total Vehicle Cost—

How to Use the Auto Loan Calculator

This auto loan calculator lets you estimate your monthly car payment before you walk into a dealership. Enter the vehicle price, your down payment, any trade-in value, the interest rate, and loan term to see exactly what you'll pay each month and over the life of the loan.

Understanding Your Auto Loan

Vehicle Price: The negotiated purchase price, not the sticker price. Always negotiate the out-the-door price before discussing financing.

Down Payment: Cash paid upfront. Aim for at least 20% on a new car and 10% on a used car. This reduces your loan amount and monthly payment, and helps prevent being "underwater" on the loan.

Trade-In Value: The amount your lender credits you for your current vehicle. Get an independent appraisal (Carmax, KBB Instant Cash Offer) before accepting the dealer's trade-in offer.

Interest Rate (APR): As of 2025, new car loan rates average 6–8% for excellent credit. Used car loans run slightly higher. Always get pre-approved by your bank or credit union to have a baseline rate before dealer negotiations.

True Cost of a Car Loan: Longer Terms Cost More

On a $30,000 loan at 7%: a 48-month loan costs $718/month and $4,456 in interest. A 72-month loan costs $511/month but $6,808 in interest — $2,352 more for the same car. Longer terms also increase the risk that you'll owe more than the car is worth as it depreciates.

New vs. Used Car Financing

New car loans typically offer lower interest rates and sometimes manufacturer incentives (0% financing deals). However, new cars depreciate 15–25% in the first year. Used cars have higher loan rates but lower purchase prices. A 2–3 year old certified pre-owned vehicle often provides the best balance of price, reliability, and financing cost.

Auto Loan Calculator — FAQs

As of 2025, average new car loan rates are 6–8% for excellent credit (720+) and 10–15% for fair credit (620–680). Used car loans typically run 1–3% higher than new car rates. Credit unions usually offer the most competitive auto loan rates — worth checking before accepting dealer financing.

Financial advisors recommend 20% down on a new car and 10% on a used car. A larger down payment lowers your monthly payment, reduces total interest paid, and prevents negative equity (being "underwater" — owing more than the car is worth).

48–60 months (4–5 years) is generally ideal. Longer terms (72–84 months) lower your monthly payment but cost significantly more in interest and increase the risk of being upside-down on the loan as the car depreciates faster than you're paying it down.

Get pre-approved by your bank or credit union before visiting the dealership. This gives you a real rate to benchmark against dealer financing. Dealers sometimes mark up your rate to earn profit on the financing — having pre-approval lets you negotiate the rate or use your own financing if it's better.

Ask for the "out-the-door" price, which includes all taxes, title, registration fees, and dealer fees. These are typically 8–12% on top of the sticker price in most states. Make sure you're comparing the same total cost when shopping multiple dealers.