Use our simple auto loan calculator to figure out how much car you can afford. If you can’t buy a quality used car in cash, I recommend choosing a car that you can purchase with comfortable payments over no more than four years (48 months).

Can you afford this payment? Use our car affordability calculator to find out.

How to use the Car Loan Calculator

Use our auto loan calculator to estimate your monthly car payment based upon the price of the car, your down payment and trade-in allowance, taxes and fees, and the interest rate and term of your auto loan. See how changing one factor (such as your down payment, term or the interest rate of the car loan) will affect your down payment.

The auto loan calculator will also show you the total interest paid if you hold your car loan for the full term. Don’t overlook this number! Even though you pay the interest over many years, this is real money that gets added to the total purchase price of the car. If you want to save money, look at ways you can reduce the interest you pay: Buy a less expensive car, put more money down, and/or get a shorter loan with larger monthly payments (if you can afford them).

FAQs about auto loans

In general, you should strive to pay somewhere between 10% and 35% of your income on a car. This means that, depending on your income, you may not be able to afford a top of the line new car. However, it’s much better to purchase a cheaper new or used car than to buy a car that you struggle to make the monthly payments for. If you’re a serious car fanatic and have plenty of wiggle room in your budget, you might consider spending up to 50% of your income, but we don’t recommend doing so unless you’re certain you can afford it.
The moment you drive your car off the lot, it will depreciate in value. This means that if you don’t put much money down on your car, it’s immediately worth less money than you owe your lender. Even if you sell your car, you’d still be on the hook for the remaining balance. Because of this, it’s important to put down as much as is comfortable when you’re purchasing a car. A good rule of thumb to aim for is 20%.
The longer the loan term, the more you’ll end up paying in interest over time. While a longer loan term may seem attractive since it comes with lower monthly payments, it’s definitely not a good deal in the long run. You should shoot for a loan term of under four years in order to ensure that you’re not paying more than you have to.

Related Tools