New Car Loan Calculator

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Reviewed by: David Chen, CFA
David is a Chartered Financial Analyst with 15 years of experience in consumer lending and auto finance analysis.

This 4-in-1 New Car Loan calculator helps you model your auto loan. Enter any three variables—Loan Amount, Annual Rate, Term, or Monthly Payment—and we will solve for the fourth.

Loan Amount ($) (P)

Annual Rate (%) (R)

Loan Term (Years) (T)

Monthly Payment ($) (M)

New Car Loan Formulas

Solve for Monthly Payment (M):
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]

Solve for Loan Amount (P):
P = M [ (1 + i)^n – 1 ] / [ i(1 + i)^n ]

Solve for Loan Term (T):
T = ln(M / (M – Pi)) / (n * ln(1 + i))

Solve for Rate (R):
Solved iteratively (no direct formula)

Formula Source: NerdWallet – Auto Loan Calculator

Formula Variables

(P) Loan Amount: The total amount financed for the new car, including any taxes, fees, and after your down payment.
(R) Annual Rate: The fixed annual interest rate (APR) for your auto loan.
(T) Loan Term: The total number of years for the loan (e.g., 3, 5, or 7).
(M) Monthly Payment: The fixed monthly payment.
(i) Monthly Rate: The annual rate divided by 12.
(n) Total Payments: The total number of payments (Term in years * 12).

Related Calculators

What is a New Car Loan Calculator?

A New Car Loan Calculator is a financial tool that helps you understand the core components of a potential auto loan. It uses the standard amortization formula to show the relationship between the loan amount (price of the car minus down payment), the interest rate (APR), the loan term (length of the loan), and your monthly payment.

Unlike simple calculators, this 4-in-1 tool allows you to solve for any *one* of those four variables, as long as you provide the other three. This flexibility is crucial when shopping for a car. Instead of just asking “what’s the payment?”, you can ask “how much car can I afford for a $500 payment?” or “what interest rate do I need to get my payment under $600?”.

By understanding how these numbers interact, you can negotiate better at the dealership, compare offers from different lenders, and find a loan that truly fits your budget without stretching yourself too thin.

How to Calculate a New Car Loan Payment (Example)

Identify Your Loan Details
You want to finance $35,000 (P) for a new car. The dealership offers you a 5-year (T) loan at a 6.9% (R) annual rate. You want to find your Monthly Payment (M).
Convert Annual Rate to Monthly (i)
First, convert the annual rate to a monthly decimal: i = (6.9% / 100) / 12 = 0.069 / 12 = 0.00575
Calculate Total Number of Payments (n)
Next, find the total number of monthly payments: n = 5 Years * 12 Months/Year = 60 payments
Apply the Amortization Formula
Use the standard loan payment formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
M = 35,000 [ 0.00575 * (1 + 0.00575)^60 ] / [ (1 + 0.00575)^60 – 1 ]
M = 35,000 [ 0.00575 * 1.4106 ] / [ 1.4106 – 1 ]
M = 35,000 [ 0.008111 ] / [ 0.4106 ]
M = 35,000 * 0.019754
M = $691.39
Final Result
Your new monthly car payment will be $691.39.

Frequently Asked Questions (FAQ)

Does this include sales tax and fees?

No, this calculator finds the payment for the “Loan Amount (P)” you enter. If you plan to finance sales tax, title fees, and dealership fees, you must add them to the car’s price (and subtract your down payment) to get the correct Loan Amount to enter.

What is a good interest rate for a new car loan?

Rates vary widely based on your credit score, the lender, and current market conditions. As of late 2024, excellent credit (780+) might secure rates between 5-7%, while fair or poor credit could see rates from 10% to 20% or higher.

What’s a typical loan term for a new car?

While 5 years (60 months) is very common, 6-year (72 months) and even 7-year (84 months) terms are now frequent. Be cautious with longer terms: while they lower your monthly payment, you will pay significantly more interest over the life of the loan and build equity much slower.

How do I find the total car price I can afford?

Enter your desired Monthly Payment (M), the Annual Rate (R) you expect to get (from a pre-approval), and the Loan Term (T) you want. Leave the “Loan Amount (P)” field blank and click “Calculate.” The result for (P) is the total amount you can finance. You would then add your down payment to this number to find your total affordable car price.

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