🚗 Car Loan Calculator

Monthly payment · Total interest · True cost with tax & trade-in

🚘 Vehicle & Loan Details

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Amount Financed
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Total Interest
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Total Cost
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Tax Paid
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Down Payment
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💰 Financing Breakdown

Vehicle price$0
Sales tax$0
Fees$0
Trade-in credit−$0
Down payment−$0
Amount financed$0
Principal vs Interest
Principal Interest

📊 Compare Loan Terms

TermMonthlyTotal InterestTotal CostNote

📈 2025 Auto Loan Rate Reference

Credit ScoreRangeNew Car APRUsed Car APRRating
Exceptional780+5.0% – 6.5%6.5% – 8.5%Excellent
Very Good720–7796.5% – 8.5%8.5% – 11%Good
Good660–7198.5% – 12%11% – 15%Average
Fair600–65912% – 18%15% – 22%High
PoorBelow 60018% – 25%+22% – 29%+Very High

Source: Experian State of the Automotive Finance Market Q1 2025. Rates vary by lender and state.

⚠️ Avoiding Negative Equity: The Depreciation Trap

The biggest financial risk in car financing isn't the interest rate — it's the gap between how fast the car loses value and how fast the loan balance goes down. Here's how that gap forms and how to stay ahead of it.

  1. Year one is the steepest drop. A new car typically loses 20%–25% of its value in the first 12 months, and roughly 10% of that happens the moment it's driven off the lot. A loan amortized over 60–84 months pays down principal slowly at first (most of the early payment is interest), so the loan balance often falls behind the car's resale value for the first 12–24 months.
  2. Long terms widen the gap. Stretching a loan to 72 or 84 months lowers the monthly payment, but it also means the balance stays high for years while the car keeps depreciating (5%–15% per year after year one). This is exactly why the term comparison table above flags 72+ month terms — the "savings" on monthly payment often gets erased by the risk of owing more than the car is worth if you need to sell or trade it in early.
  3. Small or zero down payments make it worse. Financing 100% of the price (or rolling in tax, fees, and a previous loan's negative equity) starts you further underwater from day one. A 10%–20% down payment creates a buffer that keeps the loan balance below the car's value through the riskiest early period.
  4. Check your position before trading in. Before trading in a financed vehicle, compare your loan payoff quote (from your lender) against the car's real private-party or trade-in value (from independent pricing guides, not just a dealer's offer). If payoff exceeds value, that difference gets added to the new loan — compounding the problem rather than solving it.

Frequently Asked Questions

What is a good interest rate for a car loan in 2025?

In 2025, good auto loan rates range from 5–7% APR for new cars with excellent credit (750+). Used car rates run 1–3% higher. Rates above 14% are considered high — if your rate is over 15%, consider improving your credit score or making a larger down payment before buying.

How much should I put down on a car?

Financial experts recommend at least 20% down on a new car and 10% on a used car. A larger down payment reduces your monthly payment, lowers total interest paid, and prevents being 'underwater' (owing more than the car is worth). If you can't afford 20%, consider a cheaper vehicle.

Should I choose a shorter or longer loan term?

Shorter terms (36–48 months) cost less in total interest but have higher monthly payments. Longer terms (72–84 months) reduce your monthly payment but you'll pay thousands more in interest and risk negative equity since cars depreciate faster than you pay down the loan. Avoid 84-month loans unless absolutely necessary.

Does sales tax apply to the trade-in credit?

In most U.S. states, sales tax is calculated on the purchase price minus the trade-in value. For example, if you buy a $35,000 car and trade in a vehicle worth $10,000, tax is calculated on $25,000. Some states (e.g., California, Hawaii) tax the full purchase price regardless of trade-in. Always check your state's rules.

Is it better to finance through the dealer or my bank?

Banks and credit unions typically offer lower rates than dealer financing (which includes a markup). However, dealers occasionally offer manufacturer-sponsored 0% APR promotions that beat any bank rate. Best strategy: get pre-approved by your bank first, then compare with the dealer's offer — and negotiate on price separate from financing.