1. Money

Your suggestion is on its way!

An email with a link to:


was emailed to:

Thanks for sharing About.com with others!

Most Emailed Articles

How To Fill Out Form W-4

Car Payment Calculator
Calculate Car Payments and Interest Costs

Need to know how much it will cost to buy a new auto? The car payment calculator will show you what your monthly payments will be if you borrow money to purchase an auto. What’s more, you’ll see what the vehicle truly costs after you account for the interest you’ll pay on the loan.

About.com’s free car payment calculator includes an amortization table so you can understand how your loan works. This is a set of numbers that breaks down all of the details of your auto loan for every month, including:

  • Each month’s payment
  • How much of each payment goes towards reducing your loan balance
  • How much of each payment is your interest cost
  • Total amount remaining on your loan
  • Total amount of interest paid up to any point
If you want, you can even copy this information into a spreadsheet to further slice and dice the numbers. Tip: if you’re using Excel, you’ll have to select everything, and then use Data --> Text to Columns to split the numbers up into separate columns.

The car payment calculator is already set up for a 5 year loan. There are longer term loans available, but you should generally avoid loans that last longer than 5 years. Sure, you’ll get a lower monthly payment with those loans, but you’ll pay down your loan balance slowly – so slowly that you risk being upside-down on the loan (an unfortunate situation in which you owe more on your auto than it’s worth). Then you might find yourself in the difficult position of trying to sell your car while there's still a loan outstanding.

Car Payment Calculator
Loan Amount
Interest Rate
Term (months)

Calculator and Car Buying Tips

As you work with the car payment calculator, be sure to focus on the big picture. Buying an auto is not just about the monthly payment. Auto dealers may try to direct your attention to the monthly payment, but it’s possibly the least important part of the equation (yes, the reality is that you’ve got monthly income and a limited budget, but you don’t want to waste money). They know that psychologically the monthly payment is the easiest thing for you to understand – you know what you can afford each month. But there is a lot going on behind that number, and the car payment calculator tells you everything you need to know.

If your goal is to make a good financial decision, focus instead on the purchase price of your auto. If you do that, everything else will fall into place. If you can’t afford the monthly payment, it’s a good idea to consider different cars. If the interest rate is too high, shop around and make sure that your credit scores are as high as they can be.

Play around with the car payment calculator and run several different what-if scenarios. Adjust the interest rate to see what happens. Try using a lower purchase price (whether you get that by negotiating, buying a different auto, or making a larger down payment). As you fiddle with the numbers, you’ll get a good understanding of how loans work and what it really costs to borrow money.

If you found the car payment calculator handy, be sure to see the other calculators available to you.

Thanks to javascript.internet.com for providing sample templates for the car payment calculator.

©2016 About.com. All rights reserved.