Car Loan Payment Calculator – Estimate Monthly Auto Payments

How the Calculator Works

The tool above takes four inputs you provide: vehicle price, the combined amount of down payment plus any trade‑in value, the annual percentage rate (APR) expressed as a percent, and the loan term in months. It then calculates the amount you actually finance, the fixed monthly payment, and the total interest you will pay over the life of the loan. The calculation assumes a standard amortizing loan where each payment covers interest accrued that month plus a portion of the principal, and the payment amount stays constant until the balance reaches zero.

Formula Explained (in words)

First, the amount financed is the vehicle price minus the down payment/trade‑in.

Next, the monthly interest rate is the APR divided by 12 and then by 100 to convert from a percent to a decimal.

Finally, the monthly payment is found with the amortization formula:

Monthly Payment = P × r × (1+r)^n / [(1+r)^n – 1]

where

• P = amount financed (principal)
• r = monthly interest rate (as a decimal)
• n = total number of payments (loan term in months)

Total interest is then (monthly payment × n) – P. The calculator performs these steps instantly and shows you the three results: monthly payment, total interest, and amount financed.

Worked Example 1: New Sedan

Imagine you are looking at a new sedan priced at $32,000. You plan to put $5,000 down and have a trade‑in worth $2,000, so your down‑payment‑plus‑trade‑in totals $7,000. You qualify for an APR of 5.5 % on a 60‑month loan.

• Amount financed = $32,000 – $7,000 = $25,000
• Monthly interest rate = 5.5 % / 12 / 100 = 0.0045833
• n = 60

Plugging into the formula:

Monthly Payment ≈ $25,000 × 0.0045833 × (1+0.0045833)^60 / [(1+0.0