car loan calculator

NerdWallet’s car loan calculator goes beyond basic inputs like loan amount, term, and interest rate. You can also include a down payment amount, the value of a trade-in, any amounts still owed on a trade-in, a VAT rate, title, registration and other fees – and whether you want to finance these costs.

The aim is to give you a realistic and detailed idea of ​​what it will cost to finance a car, including a repayment plan that describes how you will pay off the loan over time.

What you need to know about borrowing a car
If you can’t or don’t want to pay cash for a new car or truck, you can borrow money to pay for it. Your approved car loan provides a down payment for the vehicle so you can drive it while making monthly payments to repay the loan.

Basically, it works like this.
Factors that affect your car loan
Different aspects of a loan affect your monthly and total payment. Our car finance calculator collects these values ​​so you can plan your expenses: Vehicle price
The final price of a new car is not the MSRP (or sticker price), but this is a good starting point if you need to make an estimate. Deduct any manufacturer discounts or savings from dealer negotiations. There are also other costs such as vehicle options and the ‘destination charge’ charged for new vehicles.

It is a little more difficult to estimate the selling price of a used car. You can start with the seller’s asking price, but you may also be able to negotiate a lower price. You can also use online price guides to get an idea of ​​a reasonable price for similar cars.

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If you are prequalified or approved for a loan, enter the interest rate offered. Otherwise, you can use the current average interest rate to estimate your credit rating. This table shows Experian’s average car loan APR by credit score (based on VantageScore’s credit scoring model).

Loan period
Enter how many months you want to pay off the loan. Car loans are typically issued in 12-month increments, with typical terms of 24, 36, 48, 60, 72 or 84 months. NerdWallet recommends trying to stay longer than 60 months if possible.

Deposit
Not all lenders require a down payment, but NerdWallet recommends putting down at least 20% of the purchase price for a new car or 10% for a used car. If you can’t afford this amount, contribute as much as you can without draining your savings or emergency fund. By making a down payment, you reduce the financing costs and the total cost of the loan.
Trade-in value
When you trade in a vehicle, you enter its value. You can use websites for reviews and prices. If you use a price guide, check the trade-in value, not the retail price (the price the dealer is selling the car for). You can also get cash purchase offers from online retailers like CarMax or Carvana as a basis.

Amount to be paid at the exchange If you still have to pay off a loan for the vehicle you want to trade in, enter the remaining amount here. This is the repayment amount your lender can give you.

Tips for using a car loan calculator
A car loan calculator is a powerful tool that can help you plan and potentially save thousands of dollars. Here are some ways you can use a calculator to reduce car finance costs.

To find the cheapest loan. Apply for pre-approved loan offers from multiple lenders, but do so within two weeks to limit the impact on your credit score. Use this car loan calculator to enter interest rates and terms of loan offers to narrow down your best option. When you buy a car from a dealership or online car dealer, you can use your own financing from a bank, credit union or other lender. If you’re buying from a dealer, choose the lowest interest rate to see if the dealer can beat it.

To set a loan period. Sometimes lenders and car dealers lower your monthly car payment by extending the loan term, meaning you pay more overall. With this calculator, you can clearly see your total loan costs – not just the monthly interest – for different loan terms. You may decide that a shorter period is a better choice.

To include additional costs. Car buyers often don’t expect that there will be additional costs beyond the price of the car, such as state and local taxes, dealer documentation fees (which can vary widely) and registration fees. You can use this calculator to enter these costs under Add advanced info.
Nerd tip
An example of the difference a loan term can make: If you take out a new $40,000 car loan with an 84-month term and an interest rate of 9%, you’ll pay a total of about $623 per month over seven years in interest of $12,369 . If you shorten the term to 60 months, the monthly payment increases to $811, but your total interest drops to $8,600.

Different types of car financing.With one exception, you can use this car loan calculator for almost any type of car financing. Here are the different types of car financing you may come across.

Purchase loans are self-explanatory: They allow you to borrow money to buy a new or used car. Lenders generally define a new car as one that has never had a license plate and is from the current or previous model year. Used cars are generally considered to be vehicles that are older than the previous model year.

Refinancing loans allow you to replace your current car loan with a new one, usually with a lower interest rate or payment. Although NerdWallet has a car refinance calculator, you can use the calculator on this page to compare your current loan to a car refinance.

Leasing is a contract that allows you to drive a car for a certain amount of time and for specific miles. Monthly lease payments are for the use of the car and not for the ultimate ownership of the car, unless you decide to buy at the end of the lease term. Because leases are structured in different ways, you should use our car lease calculator to estimate monthly payments.