Checked 15 October 2026. What was checked. How these pages are maintained.
Car loan payment formula
Loan = price − down payment. Monthly rate r = annual rate ÷ 12. Payment = loan × r(1+r)n ÷ ((1+r)n − 1), where n is the number of months. This is principal and interest only. Tax, registration, warranty, and insurance are extra.
A longer term lowers the monthly bill and raises total interest. Compare the “interest over term” line before you stretch to 72 or 84 months.
Worked example
A $32,000 car, $4,000 down, 6.9% for 60 months is a $28,000 loan. Monthly payment is about $553. Total interest over the term is a few thousand dollars on top of $28,000.
Dealer “biweekly” quotes can hide a longer term. Taxes, licensing, and extended warranty are often added to the amount financed; put the full financed amount in the price or loan box.
The amount financed is not the sticker
A $22,400 vehicle with $3,900 down is an $18,500 loan if nothing else is rolled in. At 5.9 percent for 48 months the payment is about $433.63. Over 48 months that is about $20,814, so the interest is about $2,314 on top of the $18,500. Tax, a licensing fee, and an extended warranty are often added to the amount financed. If they are, the loan is larger than sticker minus down payment, and this payment is too low until you type the full amount the contract finances.
A biweekly quote is not this monthly payment cut in half. Half of $433.63 is $216.82, but 26 biweekly payments a year move more money than 12 monthly ones, and the term in weeks is a different length. Dealers sometimes stretch the term until the monthly number looks small. A 72-month version of the same $18,500 at the same rate is a lower payment and more interest. Change the months and read the interest line, not only the payment.
Paying it off faster
This page does not apply an extra $50. It gives the scheduled payment for the term you typed. To see months saved by paying more than the minimum, use the loan payoff calculator with the balance, the rate, this payment, and the extra. Confirm the lender applies extra money to principal. A prepayment penalty, which some car loans still have, is not modeled on either page.
Common questions
Does this include sales tax?
No. Add tax to the price first if you are rolling tax into the loan.
Why is my dealer quote different?
Dealers may add fees, a different compounding method, or a money-factor lease. This page is a standard amortizing loan.