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Lease vs Buy Car

Auto Loan Calculator

A car loan has three levers: the amount you finance, the APR, and the term. On the defaults here — a $42,500 car with 7% sales tax, $500 in fees and $2,000 down — you'd finance $43,975 and pay $870.76/mo for 60 months at 7% APR, about $8,270 of total interest. Edit any input below; the payment, interest and schedule update instantly, and every scenario is shareable by URL.

Vehicle & upfront money
$

The out-the-door price you agreed on, before tax and fees.

$
$

What the dealer credits you for your current car.

Taxes & fees
%

This model taxes the full price; some states tax the price after the trade-in credit.

$
Loan terms
%
mo

Longer terms lower the payment but raise total interest.

$

Extra payments go straight to principal — watch the payoff date move.

Monthly payment

$870.76/mo

Principal & interest for 5 years (60 payments) at 7% APR.

Amount financed
$43,975
Total interest
$8,270
Total loan cost (financed + interest)
$52,245

How the amount financed is built

Price incl. sales tax (7%)
$45,475
+ Registration / doc fees
$500
− Down payment
$2,000
− Trade-in value
$0
= Amount financed
$43,975
Amortization schedule (year by year)
Yearly amortization rollup: payments made, principal and interest paid, and ending balance for each year of the loan.
YearPayments madePrincipal paidInterest paidEnding balance
Year 1$10,449$7,612$2,837$36,363
Year 2$10,449$8,162$2,287$28,201
Year 3$10,449$8,752$1,697$19,448
Year 4$10,449$9,385$1,064$10,063
Year 5$10,449$10,063$386$0

The APR is treated as a nominal annual rate compounded monthly, and every default is an editable estimate — not a live market rate. Formulas and defaults are documented on the methodology page.
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How this calculator works

The calculator first assembles the amount financed: negotiated price plus sales tax and registration/doc fees, minus your down payment and trade-in. That principal is then amortized at your APR over the term. Each monthly payment covers the interest accrued that month first; the remainder reduces principal — which is why early payments are mostly interest and the balance falls slowly at first. Extra monthly payments go entirely to principal, so they shorten the payoff and cut total interest; the calculator shows both effects, and the year-by-year schedule shows where every dollar goes.

Two deliberate simplifications: sales tax is applied to the full vehicle price (some states credit the trade-in first), and APR is treated as a nominal rate compounded monthly. Both — along with every default — are documented on the methodology page. Deciding between financing and leasing the same car? Start with the lease-vs-buy guide.

Frequently asked questions

How is the amount financed calculated?
Amount financed = negotiated price × (1 + sales tax) + registration/doc fees − down payment − trade-in value, and the calculator shows this breakdown line by line. One simplification: tax is applied to the full price here, while some states tax the price after the trade-in credit. Every formula and default is documented on the methodology page.
Is the APR here the same as the interest rate?
In this calculator, yes — the APR is treated as a nominal annual rate compounded monthly, the standard amortization simplification. On a real loan offer, the disclosed APR can also fold in certain lender fees, so it may sit slightly above the note rate. Compare offers by their disclosed APRs — the CFPB auto loans hub explains what to look for.
Do extra payments actually help on a car loan?
On a typical simple-interest auto loan, yes: every extra dollar reduces principal immediately, so future interest accrues on a smaller balance and the loan ends early. Enter an extra monthly amount and the calculator shows the new payoff time and the interest saved versus paying on schedule. Check your contract for prepayment penalties before committing to a plan.
Is a longer loan term with a lower payment a good idea?
A longer term lowers the monthly payment but raises total interest, and it keeps you owing more than the car is worth for longer, because cars depreciate fastest early on — see car depreciation explained. Try 60 versus 84 months above and compare the total interest lines. If the payment only works at the longest term, test the price against your budget with the car affordability calculator.

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