This car loan calculator computes your monthly payment, total interest, and total cost of financing a vehicle — then shows how much you save by paying extra each month. Enter the vehicle price, down payment, trade-in value, interest rate, and loan term; the calculator handles the rest using standard amortization math.

The average new car loan in the US was $40,927 at 7.1% APR for 68 months, while used car loans averaged $27,253 at 11.3%, per Experian's State of the Automotive Finance Market (Q4 2025). At those averages, total interest on a new car loan exceeds $10,000 — money that goes entirely to the lender. This calculator helps you see that number clearly and test strategies to reduce it.

Auto loans use the same fixed-rate amortization formula as mortgages and personal loans:

Worked example — $30,000 loan at 7.5% for 5 years:

• Monthly rate: 7.5% ÷ 12 = 0.625%
• Payments: 60
• Monthly payment: $601.37
• Total interest: $6,082
• Total cost: $36,082

Add just $100/month extra and payoff drops from 60 to about 48 months, saving roughly $1,200 in interest. The early months of any amortized loan are interest-heavy, so extra payments early in the loan have the biggest impact.

Unlike some older loan structures, most modern auto loans use simple interest — interest accrues daily on the outstanding principal, so every extra dollar you pay immediately reduces tomorrow's interest charge. The CFPB's auto loan resource page explains borrower rights and common lender practices.

Key things to check before paying extra:

• No prepayment penalty: most auto loans have no penalty, but check your contract — some subprime and buy-here-pay-here lenders include one.
• Principal-only application: instruct your lender to apply extra payments to principal, not to "advance" your next due date. Many lender apps have a toggle for this.
• Precomputed vs simple interest: a small number of subprime loans use precomputed interest (Rule of 78s), where paying early saves less than expected. Your contract will specify which method applies.

If you're deciding between paying off a car loan early vs investing the extra money, compare your loan rate against expected investment returns. A 7.5% auto loan rate is effectively a guaranteed 7.5% return when you eliminate it — hard to beat risk-free. For context, see our Inflation-Adjusted Return Calculator.

Auto loan rates vary widely based on several factors. According to Experian data, the spread between the best and worst rates can exceed 15 percentage points:

• Credit score: the single biggest factor. Superprime (781+) borrowers averaged 5.6% on new cars vs 14.0% for deep subprime (300–500) in Q4 2025.
• New vs used: used car loans carry higher rates — typically 2–4 percentage points above new — because the collateral depreciates faster.
• Loan term: longer terms (72–84 months) usually carry higher rates than shorter terms (36–48 months), plus you pay interest for longer.
• Lender type: credit unions often beat banks and captive finance arms by 1–2 points. Dealer-arranged financing may include markup.

Before signing at the dealership, get pre-approved from your bank or credit union and use this calculator to compare the total cost of each offer. A 1% rate difference on a $30,000 loan adds roughly $800 over five years.

Shorter terms mean higher monthly payments but dramatically lower total cost. Here's how the same $30,000 loan at 7% compares across terms:

The 72-month loan costs $3,584 more in interest than the 36-month loan — and the car will likely be worth less than the loan balance (underwater) for the first few years. The CFPB recommends keeping auto loan terms at 60 months or less when possible.

Use the calculator above to run your own term comparison. If you can afford the 48-month payment, you'll save thousands compared to stretching to 72 months. For a broader view of how this auto loan fits your overall debt picture, check our Debt Payoff Optimizer or see how the payment affects your total loan payoff timeline.