How To Calculate The Costs For A New Car

A monthly auto loan payment depends on the car price, down payment, loan term, and loan interest rate. All these depend on your credit score. Used car loans are likely to have higher interest rates than new car loans. If you want to know the costs of your new car, you can calculate the costs of a new car with a pencil and paper. Or you can use easy online tools to calculate the values quickly.

Determining your monthly car payment will let you discover how terms, interest rates, and credit history lead to the result’s change. Enumerating your monthly payment before going to the car dealers can boost your negotiating power and enable you to choose an appropriate loan that suits your budget.

Car Loan Calculator

Car Price
$10,000 $100,000
Finance Duration
1 months60 months
Interest Rate
Trade In
$0 $50,000
You will pay in total:

How To Use The Auto Loan Calculator

While it is crucial to calculate your monthly car payment, a reasonable estimate will favor your side at the dealership and help you compare various auto loan offers. The auto loan calculator works in the following sections:

Car Price:

In this section, you’ll need to place the price you’d wish to pay for the car after negotiations.

Interest Rate:

Enter the rate you are illegible for or use the dropdown menu to estimate your rate based on your credit history.

The Number Of Months:

Enter the loan length or the duration to pay off the loan.


Apart from just looking at the monthly payment results, always be ready to face the complex reality of the amount you’ll pay in interest. If not enough, check the total cost of the car loan. By changing the trade-in or down payment amount, the interest rate, or loan term, you’ll discover how it influences the car payment and the total loan costs. This approach will allow you to compare various loan offers.

How To Estimate Car Price

How To Approximate New Car Prices

You can begin by using the vehicle’s sticker price (also known as MSRP); however, in most cases, you’ll be able to negotiate the sticker price. Also, manufacturing discounts may lower the price. Don’t forget to include the cost of options and the destination charge that the seller will charge for all new cars.

How To Approximate Used Car Prices

If you are purchasing a used car, determining the selling price can be challenging. You can start with the seller’s price, but you may be able to negotiate it lower. To get a fair price idea, check online categorized ads for comparable cars. You can also use online pricing guides. You can compare your model with others on websites like Cars or Autotrader.

How To Approximate Trade-In Values

Here, online sites can be your best alternative for appraisals and pricing help. While using a pricing guide, ensure that you check the trade-in value and not the retail cost. Also, your local CarMax can provide you with purchase offers. You can also get purchasing offers from Vroom or Carvana‘s online services.

How To Calculate The Costs On A Car Loan

How To Approximate Interest Rates

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If the lender approved your auto loan, enter the rate you’ve received from the lender. Additionally, you can check the interest rates offered by online lenders, or you can determine the rate they’ll likely provide you on average rates if you know your credit score. Remember, new cars have lower rates compared to used cars. A carmaker’s finance may even offer a low interest of 0% in some cases.

How To Determine The Total Costs

Loans are the common ways to finance car purchasing. This statement is true, especially when buying a new car, which associates with high costs if you’re paying in cash.

While considering the total price for your car, always keep in mind that you’ll have to pay taxes and fees. For instance, you must pay both state and local sales tax, documentation charges, and registration fees.

What Are The Methods To Calculate The Costs Of Your Loan?

There are three methods to figure out the total cost of your loan:

Method 1

Using an online calculator to calculate the finance charges on a new car loan

Step 1:
Use a computer or do it by yourself

The online calculator gives you a clear picture of the exact total figure you will owe on a car loan. You’ll get various tools online, including our online loan calculator above. For detailed information, you can use calculators at various bank sites, such as the Bank of America.

Step 2:
Fill in different fields

First, you have to fill in multiple areas such as the purchasing price, any down payment you expect, the trade-in value you plan to trade-in, interest rate, loan term, and the percentage sales tax for your state.

Step 3:

After entering the relevant information, press the “calculate” button. At this point, a helpful calculator should indicate what you expect to pay each month. This list will include the number of payments, the total amount you may wish to pay, the real interest paid, and the payoff date.


A hand calculation of the total finance charges for a new car loan is the solution. Knowing what you owe helps you know when you’ll pay off your loan and budget for other expenses.

Step 1:
Calculate the monthly payment

To get the principle and rate due per payment, convert the annual percentage rate (APR)into a decimal number by dividing it by 100. Divide the number you’ve obtained by 12 to get the monthly rate in percentage. (But still in decimal). Then multiply the principle by the monthly percentage rate. Next, enter the interest due per payment to calculate the other half of the equation. Hit the button x^y on your calculator and enter all the expenses. Lastly, subtract the figure you’ll obtain from 1. To get the monthly payment, divide the first figure you received by the second figure.

Step 2:
Calculate the total finance fees

To determine how much you are likely to incur in finance charges, multiply the monthly payment by the number of payments, and subtract what you borrowed. By doing so, you will get the total amount of finance charges you are likely to pay.

Method 3

Determining the monthly finance charges for a new car loan

Step 1:
Determining the monthly payment

Convert the annual percentage rate (APR) into a decimal by dividing it by 100. This approach will help you arrive at the principal interest rate due per payment. Next, divide the figure obtained by 12 to transfigure the monthly percentage rate into a decimal number. Lastly, multiply the principal by the monthly percentage rate.

Add 1 to the interest rates to solve the remaining half of the equation. Next step, hit the x^y button and enter the number of payments. Subtract one from the figure obtained. So, you’ll get your monthly payment by dividing the first figure obtained by the second figure. By dividing the total amount by the number of payments, you’ll arrive at the principle you are likely to pay monthly.

Step 2:
Calculate the monthly principle

Next, you need to know how much principal you’ll pay each month. And to arrive at that, divide the principal amount by the payments you will pay in months.

Step 3:
Calculate your monthly charges

And the very last calculation, determine the finance you are likely to pay. This action is as simple as multiplying your monthly payment by the number of payments. And now, you arrive at the total amount you owe each month by subtracting the principle from the number obtained.

Choosing Loan Terms

Often, car loans range from two to six years. However, in the longer term, you’ll pay more interest. Therefore, it is advisable to choose 60 months loans for new cars and 36 months for used vehicles.

The Bottom Line

Many transactions, including calculations, accompany information for car loan calculators. It is genuinely essential to know what you owe to plan for your budget, and this is what the analysis is all about.

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What to read next?

Hi, we are Lena and Chris. A finance-addicted couple from Germany. Ever since we can remember we are interested in finance. We love to research and review complex topics. As we were quite familiar with the world of finance at all, we thought we should share this information with the rest of the world. Our main reason we do this is to help people to orientate themselves in the confusing daily finance puzzle.


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