Car Payment 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 Car Payment 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)

Car Payment 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: Capital One Auto Finance

Formula Variables

(P) Loan Amount: The total amount you are financing (car price + taxes/fees – down payment/trade-in).
(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 Car Payment Calculator?

A Car Payment Calculator is a powerful financial tool that removes the guesswork from buying a car. It uses the standard loan amortization formula to calculate your monthly car payment based on the vehicle’s price (loan amount), your interest rate (APR), and the length of your loan (term).

This advanced 4-in-1 calculator goes a step further. Instead of only solving for the monthly payment, it allows you to solve for any of the four main variables. This flexibility is key to smart car shopping. For example, you can enter your desired Monthly Payment ($500), an estimated Rate (7.5%), and a Term (5 years) to instantly see the total Loan Amount you can afford. This empowers you to shop for cars within your budget.

By using this tool, you can compare different “what-if” scenarios. What happens if you get a better interest rate? How much does a 6-year loan save you per month compared to a 5-year loan? How much more in interest will you pay? This calculator gives you the data you need to make an informed financial decision.

How to Calculate a Car Payment (Example)

Identify Your Loan Details
You need to finance $30,000 (P) for a car. You are approved for a 5-year (T) loan at a 7.5% (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 = (7.5% / 100) / 12 = 0.075 / 12 = 0.00625
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 = 30,000 [ 0.00625 * (1 + 0.00625)^60 ] / [ (1 + 0.00625)^60 – 1 ]
M = 30,000 [ 0.00625 * 1.4533 ] / [ 1.4533 – 1 ]
M = 30,000 [ 0.009083 ] / [ 0.4533 ]
M = 30,000 * 0.020039
M = $601.17
Final Result
Your monthly car payment will be $601.17.

Frequently Asked Questions (FAQ)

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

Enter your ideal Monthly Payment (M), the Annual Rate (R) you were pre-approved for, and your desired Loan Term (T). Leave the “Loan Amount (P)” field blank and click “Calculate.” The result for (P) is the total amount you can finance. Add your down payment or trade-in value to this number to get your maximum car price.

Should I choose a longer loan term for a lower payment?

While a longer term (like 72 or 84 months) will lower your monthly payment, it’s generally not recommended. You will pay significantly more in total interest. Worse, you risk becoming “upside down” (owing more than the car is worth) for a longer period due to depreciation.

What’s the “Loan Amount”? Is it the car’s sticker price?

Not exactly. The “Loan Amount” (P) is the total amount you are financing. The correct way to find it is: (Sticker Price + Sales Tax + All Dealership Fees) – (Your Down Payment + Your Trade-In Value). Always ask for the “out-the-door price” when negotiating.

How do I get the best interest rate?

Your credit score is the most important factor. The higher your score, the lower your rate. The best strategy is to get pre-approved for a loan from your own bank or a credit union *before* you go to the dealership. This gives you a rate to compare against the dealership’s financing offers.

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