Car Payment Calculator
Calculate your estimated monthly car payment. adjust for trade-in value, down payment, interest rates, and sales tax to get an accurate payment estimate.
Optional: Pay more to save interest and pay off earlier.
How to Calculate Your Car Payment
Calculating your monthly car payment involves three main factors: the loan amount (Principal), the interest rate (APR), and the loan term (Length).
Key Factors Affecting Payments
- Vehicle Price: The negotiated price of the car.
- Trade-In & Down Payment: Money you pay upfront or value from your old car. This directly reduces your loan amount.
- Interest Rate (APR): The cost of borrowing money. A lower score gets you a lower rate.
- Sales Tax: Often overlooked, taxes can add thousands to your loan amount.
Formula for Monthly Car Payments
The standard formula used by lenders is:
P = (r * A) / (1 - (1+r)^-n)
- P = Monthly Payment
- A = Loan Amount
- r = Monthly Interest Rate (APR / 12)
- n = Loan Term (Months)
Can I Lower My Payment?
Yes! To lower your monthly payment, you can:
- Increase your down payment
- Choose a longer loan term (e.g., 72 or 84 months) - Note: This increases total interest paid.
- Improve your credit score to qualify for better rates
- Trade in a more valuable vehicle