🚗 Auto Loan Calculator
Auto Loan Tips
Car loans are straightforward installment loans. Your interest rate (APR) depends primarily on your credit score, loan term, and whether the car is new or used.
New vs Used Car Rates (2025 approx.)
| Credit Score | New Car APR | Used Car APR |
|---|---|---|
| 750+ | 5–7% | 6–9% |
| 700–749 | 7–9% | 9–12% |
| 650–699 | 9–13% | 13–17% |
| Below 650 | 13–20%+ | 18–25%+ |
⚠️ For informational purposes only. Rates vary by lender, state, and creditworthiness.
Frequently Asked Questions
Monthly payment = P × [r(1+r)^n] / [(1+r)^n − 1], where P is the loan amount (car price minus down payment), r is the monthly interest rate (annual rate ÷ 12), and n is the loan term in months. This is the same formula used by all lenders.
Rates vary by credit score, loan term, and whether the car is new or used. With excellent credit (720+), new car rates are typically 4–6%; used car rates run 1–2% higher. Rates rise significantly for credit scores below 620. Manufacturer financing deals sometimes offer 0% APR.
Compare both. Dealer financing is convenient but often higher rate. Banks and credit unions frequently offer better rates, especially credit unions which are non-profit. Get pre-approved by a bank first, then use that as leverage when negotiating with the dealer.
Longer terms (72–84 months) mean lower monthly payments but significantly more total interest. A $25,000 loan at 6%: 36 months = $761/month ($2,396 total interest) vs 72 months = $415/month ($4,880 total interest). The 6-year loan costs $2,484 more.
GAP (Guaranteed Asset Protection) insurance covers the difference between what you owe on your loan and the car's actual cash value if it's totaled or stolen. New cars depreciate 15–25% in year one, so you can quickly owe more than the car is worth without GAP coverage.