# Car Payment Calculator

Calculate your monthly car payment with down payment, trade-in value, and interest rate. Free auto payment calculator to plan your next vehicle purchase.

## What this calculates

Figure out your monthly car payment before you hit the dealership. Enter the vehicle price, your down payment, trade-in value, interest rate, and loan term to see exactly what you will owe each month.

## Inputs

- **Vehicle Price** ($) — min 0 — The total purchase price of the vehicle.
- **Down Payment** ($) — min 0 — Cash you pay upfront at the dealership.
- **Trade-In Value** ($) — min 0 — The value of your current vehicle trade-in.
- **Annual Interest Rate** (%) — min 0, max 30 — The APR on your auto loan.
- **Loan Term** — options: 24 months (2 years), 36 months (3 years), 48 months (4 years), 60 months (5 years), 72 months (6 years), 84 months (7 years) — The length of your auto loan.

## Outputs

- **Monthly Payment** — formatted as currency — Your estimated monthly car payment.
- **Amount Financed** — formatted as currency — Vehicle price minus down payment and trade-in.
- **Total Interest Paid** — formatted as currency — Total interest over the life of the loan.
- **Total Cost** — formatted as currency — Total of all payments plus down payment and trade-in.

## Details

Your monthly car payment depends on four main factors: the vehicle price, what you put toward the purchase upfront (down payment plus trade-in), the interest rate, and the loan term. The standard amortization formula is M = P[r(1+r)^n] / [(1+r)^n - 1], where P is the principal, r is the monthly interest rate, and n is the number of payments.

For example, a $35,000 car with $3,000 down and a $5,000 trade-in leaves $27,000 to finance. At 6.5% APR for 60 months, the monthly payment comes out to about $528. Over the full loan, you will pay roughly $4,688 in interest, making the total cost $31,688.

To keep your monthly payment manageable, financial experts suggest keeping total transportation costs (payment, insurance, gas, maintenance) under 15-20% of your take-home pay. A larger down payment or shorter loan term directly reduces total interest. Even adding $1,000 to your down payment on a 60-month loan at 6.5% saves about $70 in interest and drops the monthly payment by roughly $20.

## Frequently Asked Questions

**Q: How is a car payment calculated?**

A: Car payments use the standard loan amortization formula: M = P[r(1+r)^n] / [(1+r)^n - 1]. P is the amount financed (vehicle price minus down payment and trade-in), r is the monthly interest rate (annual rate divided by 12), and n is the number of monthly payments. For a $27,000 loan at 6.5% for 60 months, the monthly payment is about $528.

**Q: Does a trade-in reduce my monthly payment?**

A: Yes. A trade-in reduces the amount you need to finance, which directly lowers your monthly payment and total interest. A $5,000 trade-in on a 60-month loan at 6.5% APR saves about $98 per month compared to financing the full amount. If you still owe money on your trade-in, only the equity (value minus remaining balance) applies.

**Q: What is a good down payment for a car?**

A: Most experts recommend putting down at least 20% on a new car and 10% on a used car. A larger down payment reduces your monthly payment, lowers total interest, and helps avoid being upside down on the loan. Even a small down payment is better than zero down, which means you are financing the entire purchase price.

**Q: Is it better to choose a shorter or longer loan term?**

A: Shorter terms (36-48 months) have higher monthly payments but save significantly on total interest. Longer terms (72-84 months) lower the monthly payment but cost much more overall. Financing $27,000 at 6.5% for 48 months costs about $3,600 in interest, while 72 months costs about $5,800. Shorter terms also usually qualify for lower interest rates.

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Source: https://vastcalc.com/calculators/finance/car-payment
Category: Finance
Last updated: 2026-04-08