Car Loan Calculator
A car loan is a simple deal with a lot of moving parts: the price, the down payment, the trade-in, the rate and the term all change the payment. A car loan calculator pulls them together into one answer. The auto loan calculator above works for new and used cars alike, with rate quick-fills for both. With the defaults loaded — a $35,000 car, $3,500 down, 6.35% APR over 60 months — the loan is $31,500, the monthly payment is $614.12, the total interest is $5,347.37 and the payoff date is November 2031.
New and used loans are not the same product. The average new-car APR was 6.35% in the second quarter of 2026, while the average used-car APR was 11.19%, and that gap costs thousands on the same loan. This page explains how a car loan works, how new and used loans differ, and how to compare two deals properly — by total cost, not by the monthly payment alone.
How a Car Loan Works
You borrow the price of the car minus your down payment and trade-in, and you repay it in equal monthly instalments over the term you choose. Each payment covers that month’s interest first and the rest goes to principal, so the balance falls slowly at first and faster later. Most US auto loans use simple interest on the declining balance, which is what the calculator above assumes. A few lenders use precomputed interest, where the interest is fixed up front — avoid those loans, because paying early saves you nothing on them.
The loan is secured by the car itself, which is why the lender can offer a lower rate than a credit card. It also means the lender can repossess the car if you stop paying, and it means you cannot sell the car until the loan is paid off or the buyer pays it off for you. The title stays with the lender or has a lien on it until the last payment. Gap insurance covers the gap between what you owe and what the car is worth if the car is written off, which matters most in the first two years, when the loan balance falls more slowly than the car’s value.
- Principal. The amount borrowed: $31,500 on the defaults.
- APR. The annual rate including lender fees: 6.35% new, 11.19% used on average in 2026.
- Term. 36 to 84 months. The calculator offers all six terms.
- Collateral. The car secures the loan, which keeps rates lower than unsecured borrowing.
Step 1 — Work Out What You Are Borrowing
Take the vehicle price, subtract the down payment and the trade-in value, then add anything still owed on the trade-in, the sales tax and the fees. On the defaults, $35,000 minus $3,500 down gives $31,500. A trade-in worth $5,000 with $2,000 still owed on it would cut the loan to $28,500. This number is the loan amount financed, and it is the figure the interest is charged on.
Step 2 — Pick New or Used, Then the Rate
Use the quick-fill buttons for the 2026 averages — 6.35% for a new car, 11.19% for a used car — or type the rate your lender offered. The gap is the whole story of used-car finance: the same $31,500 loan costs $614.12 a month at 6.35% and $687.87 a month at 11.19%, and the total interest jumps from $5,347.37 to $9,772.49. Your own rate depends on your credit score, so check the tier table below before you shop.
Step 3 — Choose the Term and Read the Schedule
Shorter terms cost more a month and less overall. The calculator compares the same loan at 48, 60 and 72 months and shows the full amortization schedule, so you can see how much of each payment goes to interest in the early months. On the defaults, the first payment is $166.69 of interest and $447.43 of principal; by month 30, the interest is down to about $93 a month.
Worked Examples: New Car vs Used Car
The table below keeps the loan at $31,500 over 60 months and changes only the rate, so the cost of the used-car rate gap is plain to see.
| Loan | APR | Monthly payment | Total interest | Total paid |
|---|---|---|---|---|
| $31,500 new, super prime | 4.41% | $585.97 | $3,658.20 | $35,158.20 |
| $31,500 new, average | 6.35% | $614.12 | $5,347.37 | $36,847.37 |
| $31,500 new, prime | 6.15% | $611.18 | $5,170.96 | $36,670.80 |
| $31,500 used, average | 11.19% | $687.87 | $9,772.49 | $41,272.49 |
| $31,500 used, near prime | 13.93% | $731.81 | $12,408.43 | $43,908.43 |
The used-car average costs $73.75 more a month and $4,425.12 more interest than the new-car average on the same loan. The near-prime used rate costs $117.69 more a month than the new-car average. These are the same car, the same loan and the same term — only the rate changes. That is why the rate, not the price, is usually the most expensive part of a used-car deal.
How to Use the Car Loan Calculator
Enter your deal and the calculator updates everything at once.
- Enter the vehicle price. The default is $35,000. Use the out-the-door price when you have it.
- Enter the down payment and trade-in. The default down payment is $3,500, with no trade-in.
- Pick the rate. Use the new-car or used-car quick-fill for the 2026 average, or type the rate from your pre-approval letter.
- Choose the term. Pick 36, 48, 60, 72 or 84 months. The default is 60 months.
- Compare and check the schedule. Read the payment, the total interest, the payoff date and the term comparison, then scroll the amortization schedule to see the balance fall month by month.
What the Calculator Reports
Every output answers a different question about the loan.
| Figure | What it is | Use it for |
|---|---|---|
| Monthly payment | Fixed amount due every month | Budgeting and comparing deals |
| Loan amount financed | Price minus down payment and trade-in, plus tax and fees | Seeing the true size of the loan |
| Total interest | All interest over the loan | The real cost of borrowing |
| Total paid | Principal plus interest | What the car costs on finance |
| Payoff date | When the last payment is due | Knowing when you own the car |
| Term comparison | Same loan at 48, 60 and 72 months | Choosing the term |
Rates by Credit Tier, 2026
Experian’s second-quarter 2026 averages show how much your credit score is worth in rate terms.
| Credit tier (VantageScore) | Score range | Avg new-car APR | Avg used-car APR |
|---|---|---|---|
| Super prime | 781–850 | 4.41% | 6.29% |
| Prime | 661–780 | 6.15% | 8.81% |
| Near prime | 601–660 | 9.71% | 13.93% |
| Subprime | 501–600 | 13.52% | 19.10% |
| Deep subprime | Below 501 | — | Up to 21.62% |
Moving one tier can save more than any price negotiation. The jump from near prime to prime on a new car is 3.56 points, which on a $31,500 loan over 60 months saves roughly $60 a month. Check your score, fix any errors on your report, and get pre-approved before you visit the dealer.
Common Mistakes With Car Loans
These are the errors that cost buyers the most money.
- Comparing payments instead of total cost. Two loans can have the same payment and cost thousands apart in interest.
- Financing for 84 months by default. The payment looks small, but the interest on the default loan rises to $7,599.74 and you owe more than the car is worth for years.
- Not getting pre-approved. Dealer financing can be convenient, but without your own rate you cannot tell if it is padded.
- Forgetting the loan-to-value trap. Cars lose value fast. With a small down payment and a long term, you can owe more than the car is worth for most of the loan.
- Paying interest on add-ons. Warranties, paint protection and gap cover financed into the loan are paid for with interest too.
Tips for a Cheaper Car Loan
Five moves, in order of impact.
- Get pre-approved first. A bank or credit union quote gives you a rate to beat and stops the dealer marking it up.
- Put more money down. Every $1,000 down cuts the payment by about $19.50 a month on a 60-month loan at 6.35%.
- Shorten the term. A 48-month loan on the defaults costs $744.84 a month but saves $1,094.87 of interest against 60 months.
- Pay extra when you can. $100 extra a month on the default loan finishes it in 51 months and saves $880.34 of interest.
- Consider a newer used car. A nearly new car at the used rate can still cost more in interest than a new car at the new rate, so run both through the calculator.
Car Loan Quick Answers
The reference numbers for the default loan, all verified in the calculator above.
| Figure (2026) | Value | Source |
|---|---|---|
| Average new-car APR | 6.35% | Experian, Q2 2026 |
| Average used-car APR | 11.19% | Experian, Q2 2026 |
| Average new-car payment | $765 a month | Experian, Q2 2026 |
| Average used-car payment | $542 a month | Experian, Q2 2026 |
| Average amount financed (new) | $43,610 | Experian, Q2 2026 |
| Average new-car price | $50,562 | Kelley Blue Book, Sept 2026 |
| Fed average, 60-month new-car loan | 7.14% | Federal Reserve G.19, June 2026 |
| Prime rate | 6.75% | Federal Reserve, since Dec 2025 |
Related tools on this site: the main auto loan calculator, the loan payment calculator for any other loan, and the sales tax calculator for the tax on your purchase. NerdWallet’s auto loan calculator is a useful second check on the same numbers.
Frequently Asked Questions
What is the monthly payment on a $31,500 car loan?
At 6.35% APR over 60 months, the payment is $614.12 a month, with $5,347.37 of total interest and $36,847.37 paid in total. At the used-car average of 11.19%, the same loan costs $687.87 a month and $9,772.49 of interest.
Is it better to get a car loan from a bank or a dealer?
Get a quote from your own bank or credit union first, then let the dealer try to beat it. Dealer financing is convenient and sometimes carries a manufacturer incentive rate, but without your own quote you cannot tell whether the dealer’s rate is marked up.
How long should a car loan be?
Sixty months is the common middle ground, and the average new-car term in 2026 was about 69 months. A 48-month loan saves $1,094.87 of interest against 60 months on the defaults, while an 84-month loan adds $2,252.37 of interest. Shorter is cheaper if the payment fits your budget.
What credit score do I need for a good car loan rate?
Scores of 661 and above are prime, with average new-car APRs around 6.15%, and scores of 781 and above are super prime at about 4.41%. Below 601, the average new-car APR rises above 13.52%, so improving your score before you buy is worth more than negotiating the price.
Can I pay off my car loan early?
Yes, on a standard simple-interest loan, and it saves interest. Adding $100 a month to the default loan finishes it in 51 months instead of 60 and saves $880.34 of interest. Check that your loan has no prepayment penalty first — most US auto loans do not, but a few precomputed-interest loans do.
Disclaimer: This calculator is for general information only and is not financial advice. Rates and payments are estimates based on the numbers you enter; your lender’s actual offer depends on your credit score, the vehicle and current market rates. Check the terms with your lender before signing.