Monthly payment · Total interest · Amortization schedule · Term comparison
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Car dealerships are very good at one thing: moving your attention from the total cost of the loan to the monthly payment. "Can you do $450/month?" sounds reasonable. But at 9.5% over 72 months, a $24,000 car ends up costing $32,000. Use this calculator to see your true cost — then decide.
Longer terms lower monthly payments but dramatically increase total cost. On a $30,000 loan at 7%: a 48-month loan costs $3,187 in interest; an 84-month loan costs $8,052 — $4,865 more. You also risk being "underwater" — owing more than the car is worth as it depreciates 40–60% over 5 years. The monthly payment looks attractive at 84 months, but you'll likely still owe more than the car's trade-in value when you're ready for your next vehicle, trapping you in a cycle of negative equity.
New car loans typically carry lower interest rates than used car loans (lenders see new cars as less risky collateral). However, new cars lose 15–20% of their value in the first year and 40–50% within three years. A certified pre-owned (CPO) vehicle that's 2–3 years old has already absorbed that depreciation hit — you pay less for the car AND avoid the steepest depreciation curve, even if your rate is slightly higher. Run the numbers both ways: sometimes a used car at 7.5% APR still costs thousands less than a new car at 5.5% over the same term.
Every dollar you put down reduces your loan principal, which lowers both monthly payments and total interest paid. On a $35,000 car at 7% for 60 months: a 10% down payment ($3,500) saves $483 in total interest versus 0% down. A 20% down payment ($7,000) saves $966 in total interest and drops monthly payments by ~$116. Down payment also protects against negative equity — financing 100% of a vehicle that depreciates 20% in year one means you immediately owe more than it's worth.
Once you know your monthly payment and total interest, take these steps: (1) Pull your free credit report at AnnualCreditReport.com — errors can cost you 1–2% APR. (2) Get pre-approved through your bank or credit union before stepping into a dealership. (3) Use your pre-approval rate as a baseline to negotiate dealer financing. (4) Run the numbers at different down payment amounts — every $1,000 extra down saves roughly $1,050–$1,200 in total cost on a 5-year loan.