BCBetter Calculators

Car Loan Calculator

Calculate your monthly car loan payment, total interest, and total cost.

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Enter your values and click Calculate

How It Works

The monthly payment is calculated using the standard loan amortization formula: M = P × r(1+r)^n ÷ ((1+r)^n − 1), where P is the loan principal, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of monthly payments. For example, a $25,000 loan at 6.5% annual rate (0.5417% monthly) for 60 months: r = 0.065 ÷ 12 = 0.005417; (1+r)^60 = 1.005417^60 ≈ 1.383; M = 25000 × (0.005417 × 1.383) ÷ (1.383 − 1) = 25000 × 0.007492 ÷ 0.383 ≈ $489 per month. Total amount paid equals the monthly payment multiplied by the number of months. Total interest equals total paid minus the original principal. The formula assumes equal monthly payments and standard compound interest with monthly compounding.

Examples

New Car Loan
$25,000 at 6.5% for 60 months — a typical new vehicle financing scenario.
Result: ~$489/month. ~$4,350 total interest. Total paid: ~$29,350.
Used Car Loan
$15,000 at 9% for 48 months — used car at a higher interest rate.
Result: ~$373/month. ~$2,900 total interest. Total paid: ~$17,900.
Long-Term Financing
$35,000 at 7% for 84 months — longer term keeping monthly payments lower.
Result: ~$532/month. ~$9,700 total interest — much more than a 60-month term.

Frequently Asked Questions

Does this include taxes or fees?
No — the calculator uses only the loan amount you enter. If taxes, registration fees, dealer documentation fees, or an extended warranty are being rolled into the loan, add those amounts to the principal before entering it. This is a common practice that significantly inflates the amount financed and the total interest paid.
Should I choose a shorter or longer term?
Shorter terms have higher monthly payments but significantly less total interest and build equity faster, reducing the risk of being upside-down on the loan. Longer terms reduce the monthly payment but increase total cost considerably — compare the 60-month and 84-month examples above to see the difference. Choose the shortest term where the payment comfortably fits your budget.
Should I finance through the dealer or my bank?
Always get a pre-approval from your bank or credit union before visiting the dealership. This gives you a baseline rate to compare against the dealer's financing offer. Dealers sometimes offer manufacturer-subsidized rates (0% or 1.9% deals) that beat bank rates, but non-promotional dealer financing often carries a markup of 1–2 percentage points above the rate the dealer could offer, as a source of additional profit.

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