What this calculator does
Car finance is usually quoted as a weekly or monthly figure, which makes it easy to compare payments and hard to compare costs. This calculator starts from the vehicle price, applies tax and fees, subtracts your deposit and trade-in, and reports both the repayment and the total the car ends up costing.
The total cost line is the one worth attention. A longer term lowers the monthly figure while raising the total, and on a depreciating asset that combination is how people end up owing more than the car is worth.
The formula
Tax and fees are added to the price, then the deposit and trade-in are subtracted to give the amount financed. That amount is amortised over the term using the standard loan formula.
| Term | Meaning |
|---|---|
| A | Amount financed: price plus tax and fees, less deposit and trade-in. |
| i | Monthly interest rate: annual rate ÷ 12 ÷ 100. |
| n | Number of monthly payments. |
The inputs explained
| Field | What to enter |
|---|---|
| Vehicle price ($) | The negotiated price of the vehicle, before tax. |
| Deposit ($) | Cash you are putting in up front. |
| Trade-in value ($) | The trade-in value credited for your existing vehicle. Enter zero if there is none. |
| Tax & registration (% of price) | Sales tax, stamp duty and registration, as a percentage of the price. This varies widely by jurisdiction. |
| Fees ($) | Dealer delivery, loan establishment and any other fixed fees. |
| Annual interest rate (%) | The annual interest rate on the finance. |
| Term (years) | The loan term. Terms beyond five years are common but increase total cost substantially. |
When to use it
Dealer finance versus a bank loan
Run both offers at their own rates and terms. Dealer finance sometimes carries a subsidised rate on a shorter term; a bank may offer a lower rate over longer. Compare total cost, not the weekly figure.
Deciding how much deposit to put down
Increase the deposit and watch the total interest fall. Money used as a deposit avoids interest at the loan rate, which is usually higher than what the same money earns in savings.
Understanding a balloon payment offer
Balloon or residual structures lower the monthly payment by deferring part of the principal. This calculator does not model them directly, but you can approximate it by financing only the amount that will actually be amortised, and treating the residual separately.
Working out the real cost of a longer term
Seven-year car loans exist because they make expensive cars look affordable monthly. Compare the total cost line at five and seven years on the same car: the difference is usually thousands.
Worked examples
Every figure in the tables below is produced by this page’s own calculator at build time, so the numbers and the tool always agree. Select any row to load that scenario.
Repayments on a $35,000 car at different rates
A $35,000 vehicle with a $5,000 deposit, 3.5% tax and $400 in fees, financed over five years.
| Interest rate | Monthly payment | Total interest | Total cost of the car |
|---|---|---|---|
| 3% | $568.26 | $2,470.59 | $39,095.59 |
| 5% | $596.80 | $4,183.17 | $40,808.17 |
| 7% | $626.21 | $5,947.77 | $42,572.77 |
| 9% | $656.48 | $7,763.98 | $44,388.98 |
| 11% | $687.60 | $9,631.25 | $46,256.25 |
| 14% | $735.86 | $12,526.51 | $49,151.51 |
How the term changes the cost
Same car, same rate, different loan lengths.
| Term | Monthly payment | Total interest | Total cost of the car |
|---|---|---|---|
| 2 years | $1,437.54 | $2,875.86 | $39,500.86 |
| 3 years | $998.32 | $4,314.64 | $40,939.64 |
| 4 years | $779.50 | $5,791.12 | $42,416.12 |
| 5 years | $648.84 | $7,305.12 | $43,930.12 |
| 6 years | $562.24 | $8,856.38 | $45,481.38 |
| 7 years | $500.83 | $10,444.62 | $47,069.62 |
The effect of a larger deposit
Every dollar of deposit removes a dollar of financing at the loan rate.
| Deposit | Monthly payment | Amount financed | Total interest |
|---|---|---|---|
| $0 | $751.42 | $36,625.00 | $8,460.08 |
| $2,500 | $700.13 | $34,125.00 | $7,882.60 |
| $5,000 | $648.84 | $31,625.00 | $7,305.12 |
| $10,000 | $546.25 | $26,625.00 | $6,150.16 |
| $15,000 | $443.67 | $21,625.00 | $4,995.20 |
Questions
Should I include tax and registration in the price?
Enter the price before tax, and put the tax rate in its own field. That way you can adjust the rate for your jurisdiction without recalculating the price.
What about a trade-in with money still owing on it?
Enter the trade-in value net of what you owe. If you owe more than it is worth, the shortfall usually gets rolled into the new loan, so add it to the fees field instead.
Is a longer term ever sensible?
Occasionally, if the rate is genuinely low and the cash freed up is doing something more productive. But since cars depreciate faster than most loans amortise, long terms often leave you owing more than the vehicle is worth for years.
How does this differ from the loan payment calculator?
The underlying amortisation is identical. This version adds the vehicle-specific steps, tax on the price, fees, deposit and trade-in, before financing the remainder.
For a general loan without vehicle costs, use the loan payment calculator. To check the repayment fits your budget, see the debt-to-income calculator.