Car Loan Calculator: Estimate Your Monthly Car Payment

Buying a new car can be a stressful process if you haven’t done your homework. One of the best ways to make getting your next car a pain-free experience is to find out how much car you can actually afford, which makes a car loan calculator an invaluable tool.

How to use a car loan calculator

Before you get started, be sure to have the information below handy so you can enter the information in their respective fields. This calculator will give you a ballpark figure of what you can expect for a monthly car payment on your new car.

  • Car price
  • Trade-in value
  • Down payment
  • Interest rate
  • Length of loan

Bear in mind that the figure in the calculator is not dead-on accurate. It doesn’t account for taxes, discounts / rebates, and so on. Our car loan calculator is meant to be a guide to help you find a car you can afford.

Car Loan Calculator

car loan calculator

Types of car loans

All car loans are installment loans, but there are different ways to get one and they make up the different types of auto loans.

Direct Financing

This style of car loan is when you get funding from a bank, credit union, or an online financing company. Borrowers are able to get pre-approved for this type of loan so they know exactly how much they’re able to spend up front rather than finding the car they want and then applying for a loan. Direct financing is the preferred way to shop for a car since you’re able to compare offers and choose the best one for you.

Indirect Financing

Indirect financing is when a dealership will act as a middleman and find a lender for you. Some dealerships have access to their own network of lenders or finance companies like Toyota Financial. Dealerships are able to do this, and make money, by adding an extra percentage point on your interest rate. This, typically, makes their loans more expensive than other types in the long run.

In-House Financing

As the name implies, this car loan type is when you finance your new vehicle through the dealership itself. You’ll buy the vehicle and get your loan from the same place. This type of loan is found in smaller dealerships and most common for buyers with bad credit. These loans typically have the highest interest rates and are the most expensive.

Car Loan FAQs

How can I get a good price on my car?

There are a number of negotiating tactics you can use from something as simple as asking if they have any specials, promotions, or deals going on to playing hard ball by making it clear that you’re willing to walk away if they aren’t willing to give you a better deal. You can find more about that in our negotiating guide.

One bit of advice we’ll add is to focus on getting the best interest rate you can. It may not be as flashy as knocking $2,000 off the sticker price, but it can save you much more over the life of the loan.

Is it better to get a short or long term car loan?

There isn’t a simple answer. It depends on your budget and what you can afford, which is why you should use a car loan calculator. You don’t want to bite off more than you can chew because you can end up missing payments and possibly getting your car repossessed. If you don’t have a budget, you can find out how to make one here.

If you do have one, look at how much money you have left over at the end of each month and make a decision on how much of that you’re willing to part with and still be comfortable then use that number as your guide for the monthly payment on your new car.

How much should I put down at signing?

Some people will tell you 20% down others will say nothing down, but we’re firm believers in putting down as much as you possibly can. Firstly, it’s a major bargaining chip. Dealerships will be willing to jump through hoops for you if you can put down a sizable downpayment.

Secondly, you can lower your monthly payment by lowering the total amount you’re financing. While something like $40 a month may not sound like much, it adds up and it’s less interest you’ll have to pay on the loan.

For instance, I put $10,000 down when I bought my Tundra and I was able to get the dealership to lower my interest rate by 2%. That also makes it so that I won’t ever be upside down on the loan. So, if my truck happens to get totaled because of a hailstorm or a bad accident, I won’t lose money on the payout.

Which cars have the best resale value?

Trucks hold onto their value very well and have some of the best resale values out there. There are also a good number of import sedans that have high resale values as well. You can see the whole list here. However, one thing to keep in mind is that no matter what vehicle you buy, it will depreciate as soon as you drive it off the lot if you buy new. It’s usually in your best interest to buy a used vehicle that’s 1-3 years old so you can take advantage of that depreciation.

Should I even buy a car?

There are really only two reasons to not buy a car. 1) you live in a metropolitan / urban city that has great public transportation or where everything is in walking distance, and 2) you drive less than 5,000 miles a year. You can easily get away with leasing a car or saving up for a bit and buying a used car in cash if you fall under the latter point.

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