Work out your monthly car loan payment after down payment and trade-in value, along with the total interest you'll pay over the life of the loan. Also works as a car payment calculator for any vehicle purchase.
After your down payment and trade-in, 25,000 is financed over 60 months at 6.9%.
An auto loan is a fixed-rate installment loan: you borrow the vehicle price (minus down payment and trade-in value) and repay it in equal monthly installments over a set term, with interest calculated on the declining balance.
P is the amount financed, r is the monthly interest rate (APR ÷ 12), and n is the loan term in months. Financing $25,000 at 6.5% APR over 60 months results in a monthly payment of about $489, with roughly $4,340 in total interest paid.
| Term | Monthly payment | Total interest |
|---|---|---|
| 36 months | $766 | $2,590 |
| 48 months | $592 | $3,420 |
| 60 months | $489 | $4,340 |
| 72 months | $421 | $5,310 |
$25,000 auto loan at 6.5% APR — monthly payment vs. total interest by term
Example 1 — New car, good credit: A $32,000 new car with a $4,000 down payment leaves $28,000 financed. At 5.5% APR over 60 months, the payment is about $535/month, with roughly $4,100 in total interest.
Example 2 — Used car, fair credit: A $16,000 used car with no down payment financed at 9.5% APR over 48 months costs about $401/month, with roughly $3,240 in total interest — a noticeably higher rate reflects both the used-vehicle premium and credit profile.
Example 3 — Trade-in reduces the loan: Financing a $35,000 vehicle with a $6,000 trade-in and $2,000 down leaves $27,000 to finance; at 6% APR over 60 months that's about $522/month versus roughly $676/month without the trade-in.
| Auto loan (buying) | Lease | |
|---|---|---|
| Ownership at end | You own the car | Return or buy at residual value |
| Monthly payment | Usually higher | Usually lower |
| Mileage limits | None | Typically 10,000–15,000 mi/yr |
| Best for | Long-term ownership, high mileage | Lower payments, frequent upgrades |
What's the difference between APR and interest rate on a car loan? APR includes certain lender fees along with the interest rate, giving a more complete picture of borrowing cost.
Should I put money down? A down payment of at least 10–20% reduces monthly payments and interest, and helps avoid owing more than the car is worth.
Can I pay off an auto loan early? Most auto loans allow early payoff, though a few include prepayment penalties — check your contract.
How does my trade-in value affect the loan? The trade-in value is subtracted from the vehicle price before financing, directly lowering the amount you borrow and therefore your payment and total interest.
Is it better to finance through the dealer or a bank? Dealer financing can be competitive or even below market when manufacturers subsidize rates, but it's worth comparing against a pre-approved bank or credit union rate before deciding.
What happens if I owe more than the car is worth ("underwater")? If you sell or the car is totaled, you may still owe the difference between the loan balance and the car's value or insurance payout — longer terms and small down payments increase this risk.
Does rolling in sales tax and fees change my payment much? Yes — financing taxes and fees increases the principal, which raises both the monthly payment and total interest, even though it avoids an upfront cash outlay.
How much does a lower credit score typically raise my rate? It varies by lender, but the gap between top-tier and subprime credit auto loan rates is often several percentage points, which can add thousands of dollars in interest over the loan term.
Financing $22,000 (after a $3,000 down payment and trade-in on a $25,000 car) over 60 months at 7% gives a monthly payment of roughly $436, with about $4,160 in total interest — a 72-month term at the same rate would lower the payment to around $377 but raise total interest to roughly $5,140.
Trade-in value: The amount a dealer credits toward a new purchase for your existing vehicle.
Negative equity: Owing more on a loan than the vehicle is currently worth.
Depreciation: The decline in a vehicle's value over time, fastest in the first few years of ownership.
What's a good interest rate for a car loan?
Rates vary with credit score and market conditions, but well-qualified buyers often get noticeably lower rates than those with fair or poor credit — shopping around matters.