How much will my monthly car payment be?
Use our calculator to estimate your monthly payment based on the purchase price of your vehicle, the value of your trade-in, your down payment, and other cost factors. Calculating your monthly car loan payments make it easier to weigh competing loan offers.
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Monthly car payment calculator
Use our monthly car payment calculator to estimate your payments, as well as the interest you'll pay over the length of your loan. Your payment is calculated based on several factors:
Loan amount: You can lower the amount you need to borrow through cash rebates, trade-ins, and a higher down payment. Learn how much you should put down on a car.
Interest rate: Rates fluctuate all the time; shopping around for an auto loan could save you more in interest. You could also refinance your car loan later to a more favorable rate.
Loan term: A longer loan term usually means lower monthly payments, but interest rates may be higher for long-term loans, which could cancel out any potential monthly savings.
Using our monthly car payment calculator before you get preapproved for an auto loan can make it easier to budget for your new car. You should also keep in mind the insurance requirements for a financed car. Lenders typically require you to carry comprehensive and collision coverages on a financed vehicle, which may increase your insurance rate if you don't carry these coverages on your current car.
This calculator is for illustrative and educational purposes only. Its accuracy and applicability to your circumstances is not guaranteed. You may wish to consult your own adviser regarding your particular circumstances.
How high of a car payment can you afford?
Experts suggest that you shouldn't spend more than 20% of your take-home pay towards monthly auto payments and related expenses. The exact amount you pay toward your auto loan each month includes three things:
Your down payment and trade-in: Your down payment is how much money you're paying out of pocket for your car. The more money you put down, the less you need to borrow and the lower your monthly payments will be. If you're trading in a car, its value is considered part of your down payment, so you don't have to put as much cash down.
Annual interest rate: Your interest rate is the cost of borrowing money. Your credit score has a big impact on the rate your lender will offer you, though market conditions can also affect the rate you get.
Loan term: This is how long your loan will last, ranging anywhere from 24 to 84 months long (two to seven years). A longer loan term may lower your monthly payment, but you'll typically pay more in interest.
Besides your monthly car payment, there are other costs of ownership to keep in mind, such as:
Insurance: Your insurance rate may change once you add your new car to your policy, but you can use your current rate for budgeting purposes.
Fuel and maintenance: These costs may vary based on the type of car you buy, e.g., a full-size SUV will use more gas than a compact sedan. You should also consider the cost of regular maintenance, such as oil changes, tire rotations, etc.
Title, registration, and taxes: You'll pay initial title and registration fees on your new car, plus any tax owed.
How to lower your monthly car payments
The best time to get a lower car payment is before you finance your purchase of a new car. That's when you can shop around for low interest rates and longer loan terms.
According to Experian, in the second quarter of 2024, the average car payment for a new car was $734, and the average payment for a used car was $525. A payment that high can make a serious dent in your budget. Here are some tips to help keep your payments as low as possible.
Compare multiple loan offers
Financing your purchase through the dealership is easy, convenient, and quicker than shopping around for other offers, but it may not be your best bet. Interest rates vary significantly from lender to lender. Comparing multiple loan offers from different lenders can help ensure you get the lowest rate possible.
Buy a lower-priced vehicle
If buying the car of your dreams means stretching your budget so thin it jeopardizes your financial health, consider borrowing less to buy a lower priced vehicle. If you've got your heart set on a specific make and model, buying a used version of the same car may be better for your wallet than buying new. Learn more about tips for buying a used car.
Improve your credit
Your credit score is a key factor that lenders use to determine interest rates. People with higher credit scores typically qualify for lower rates than people with lower scores. If you have a lower credit score, taking the time to improve it may help you qualify for a lower rate, reducing your monthly payment.
Make a larger down payment
The larger your loan, the higher your monthly payment will be. You can reduce the amount you need to borrow by increasing your down payment. If you can't afford to make a large down payment, consider saving up before purchasing your next vehicle.
Extend your loan term
A longer loan term will result in a lower monthly payment, but you'll pay more in interest over the life of the loan. For example, if you get a $25,000 loan with a 3.5% interest rate for 48 months, your monthly payment will be $559, and you'll pay a total of $1,827 in interest. If you extend the loan term to 72 months, it will reduce your monthly payment to $385, but you'll pay $2,753 in interest.
Extending your loan term also increases your risk of becoming upside-down on your loan because most cars decrease in value over time. If you're in an accident, the insurance company will only pay up to the car's actual cash value at the time of the incident (unless you have gap insurance or loan/lease payoff coverage). If your car is totaled, and you owe more than it's worth, you'll be responsible for paying the lender the difference between your loan balance and the value of your car.
How to get a lower car payment after your purchase
One of the most effective ways to reduce your monthly payments is to refinance your car loan — if you can qualify for a new one. If you didn't compare multiple offers or your credit has improved since you got your current loan, you may be able to get a lower interest rate by refinancing, which will reduce your monthly payments.
How to lower your car payments without refinancing
If you don't want to refinance your existing loan but still want to lower your monthly payments, you have a couple of options.
Talk to your lender: If you're struggling to make your payments because of financial hardship, get in touch with your lender. They may be able to make your payments more manageable by reducing your interest rate, deferring payments, or extending your loan term.
Trade in your current vehicle: If you bought a car you can't afford, or your financial situation has changed since your purchase, consider trading in your car for a less expensive one.
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