Car Loan Calculator
Price, deposit, rate and term — the monthly payment and the true cost of the finance.
How this is calculated
loan = price − (down + trade-in); M = loan·r(1+r)ⁿ ÷ ((1+r)ⁿ − 1), r = APR ÷ 12, n = years × 12
Worked example: $30,000 car, $5,000 down, 8% over 5 years finances $25,000 → about $507/month and roughly $5,400 in interest. Add $3,000 to the deposit and the monthly drops to about $446 with ~$4,700 interest — the deposit pays you back in lower cost.
Watch the term
Stretching to 7 years shaves the monthly but the car depreciates faster than the loan, so you spend longer owing more than it's worth. If a 5-year payment is a stretch, the honest signal is to buy a cheaper car — not to lengthen the loan.
The instalment is not what the car costs
Vehicle finance is sold on a monthly figure, and the monthly figure omits most of the cost of ownership. Comprehensive insurance is usually compulsory while the car is financed and, for a young driver on a newer vehicle, can rival the instalment itself. Then licensing, fuel, tyres, servicing, and the maintenance that begins the day a service plan expires. A rule that holds up well is to budget half the instalment again for everything else, and to verify it with an actual insurance quote before signing rather than after.
Depreciation runs faster than the loan
A new car typically loses about a fifth of its value in the first year and roughly half within three, while a long loan pays down capital slowly at the start. The two curves cross late, which means that for much of a five- or six-year term you owe more than the car is worth. That gap only matters if you need to sell, are written off, or want to change vehicles — which is exactly when it hurts, and why gap insurance exists.
A larger deposit and a shorter term are the two levers that close it. A trade-in helps in the same way, but only at its real value: dealer trade-in offers are frequently strengthened by weakening the discount on the new car, so negotiate the two numbers separately.
Term length, and the seven-year problem
Extending a term lowers the instalment and raises total interest sharply, and it extends the period of negative equity. Terms beyond five years are common now and are usually a sign that the vehicle is more expensive than the buyer can comfortably afford. If a car only works over 84 months, the honest reading is that it does not work.
Where to get the finance
Dealer finance is convenient and frequently comes from a single provider whose rate reflects the relationship rather than the market. Arranging pre-approval from your own bank costs nothing and changes the negotiation entirely, because you arrive with a rate the dealer must beat rather than one you must accept. Compare on the total amount repayable, not the instalment — that is the number immune to term games.
Frequently asked questions
Should I include the down payment and trade-in?
Yes — enter both. The loan is only the part you finance: vehicle price minus your down payment and any trade-in value. A bigger deposit shrinks the loan, the monthly payment, and the total interest all at once, which is why putting money down is the cheapest lever you have.
What about tax, fees and “on the road” costs?
This calculates the finance on the price you enter. If your dealer rolls taxes, registration or add-ons into the loan, add them to the vehicle price so the payment reflects what you actually borrow. Insurance and running costs sit outside the loan entirely.
Is a longer car loan a bad idea?
Longer terms (72–84 months) lower the monthly but pile on interest, and cars depreciate faster than the balance falls — so you can end up owing more than the car is worth (“underwater”). Shorter is cheaper and safer; use the term slider to see the interest cost of stretching it.