Fort Pitt Capital Group is an investment advisory firm and does not offer loans or any other banking services.

Auto Loan Calculator and Common Questions

When shopping for a new car, determining how much you can afford can help you set your price range. With our auto loan calculator, you can estimate your monthly payments and analyze the impact of your rate, down payment, price, loan amount, and loan term.

After using our auto loan calculator, you can start shopping for a vehicle that best fits your budget. If you want additional guidance or discuss your situation with a financial advisor, turn to us at Fort Pitt Capital Group.

How to Use Our Auto Loan Calculator

Our auto loan calculator will help you estimate how much you can afford to pay for a car each month. You’ll need to put the following details into our calculator to estimate your car loan payment.

1. Price of Car

To begin, create a list of vehicles you’re interested in purchasing and look up the prices. To estimate the cost of a new car, start with its sticker price, also known as the MSRP. Then subtract any potential savings from manufacturer rebates or dealer negotiations. Next, add the destination fee and the cost of options.

If you plan on buying a used car, estimating the price can be a bit more complicated. Though you may negotiate the price down, you may want to start with the asking price. You can also estimate a fair price by checking local classified ads online or using online pricing guides.

2. Down Payment Amount

For your down payment, enter the amount of cash you’re planning on putting toward your new vehicle upfront. If you are trading in a vehicle, include the value of this car in your estimate as well. Do some research online for pricing help and appraisals. If you use a pricing guide, check the trade-in value rather than the retail cost.

Any down payment amount can help reduce your monthly payments and the amount of interest you’ll pay throughout your repayment period. If you are not putting any cash down on the car, you can put 0 as your down payment amount.

3. Amount of Loan

Enter how much you want to borrow from the lender. If you’re unsure how much you want to borrow, you can instead enter only the car price and the down payment. Our calculator will automatically determine the auto loan amount for you.

4. Number of Months

Enter your loan term, which is the amount of time you want to have to repay the auto loan. The loan term is expressed in months. Common terms for auto loans are 36 months (three years), 48 months (4 years), 60 months (5 years), and 72 months (6 years).

A longer loan term can lower your monthly payment. However, the longer the term, the more you will pay in total interest. Therefore, selecting a loan term that works best for your financial goals and budget is essential.

5. Annual Interest Rate

Your interest rate can significantly impact how much you pay in interest over the duration of your auto loan. There are a few ways you can estimate the interest rate to input in our calculator. Your interest rate is typically determined by your credit score, credit history, down payment, loan term, loan amount, and the current rates in the market.

Check the rates from online lenders. If you’re already pre-approved or pre-qualified for an auto loan, enter the interest rate you were offered.

6. Payment Method

For the payment method, you can select either end-of-period or start-of-period. Your choice of payment method will affect your amortization schedule and when your payments are due. It can also impact how much you will pay in total.

For example, let’s say you choose a car price of $20,000, a down payment of $4,000, a loan amount of $16,000, a loan term of 48 months, and an annual interest rate of 5% today. Then, if you select a payment method of end-of-period, your periodic payment would be $368.47, and your total payment would be $17,686.54.

If you select a payment method of start-of-period, your periodic payment would be $366.94, and your total payment would be $17,613.13. Your first payment and last payment would also be due a month earlier than they would be with an end-of-period payment method.

7. Payment Amount

Once you enter these amounts, our auto loan calculator can generate your estimated payment amount. For example, for a car price of $20,000, a down payment of $4,000, a loan amount of $16,000, a loan term of 48 months, an annual interest rate of 5%, and a start-of-period payment method, your payment amount would be $366.94. You would be paying this amount each month for your auto loan.

8. Down Payment Percent

If you enter the price of the car and the down payment, our auto loan calculator will automatically generate the down payment percentage. This calculation is useful when you are required to provide your lender with a minimum percentage cash deposit.

For example, with a car price of $20,000 and a down payment of $4,000, your down payment percent would be 20%.

9. Total Interest

A key part of understanding how much you can afford is understanding how much you’ll pay in interest over the loan duration. For example, with a car price of $20,000, a down payment of $4,000, a loan amount of $16,000, a loan term of 48 months, an annual interest rate of 5%, and a start-of-period payment method, your total interest would be $1,613.12.

10. Total Principal and Interest

Finally, after you enter your numbers, our calculator will estimate your total principal and interest. This amount is how much you will pay in total over the duration of your loan. For instance, with a car price of $20,000, a down payment of $4,000, a loan amount of $16,000, a loan term of 48 months, an annual interest rate of 5%, and a start-of-period payment method, your total principal and interest amount will be $17,613.12.

How to Lower Your Monthly Auto Loan Payment

Transportation costs are one of the most significant expenses Americans face. Though these costs include gas, maintenance, and repairs, the greatest factor that increases this amount is the price of the vehicle. If you’re not entirely thrilled with your estimated monthly auto loan payment, there are a few steps you can take to lower your payment.

• Shop around: Shop around at dealerships and lenders to find the best possible deal. Along with the total monthly payment, compare the annual percentage rate, the loan amount, and the loan term from lender to lender. If you’re getting offers that don’t fit within your budget, you may want to work to improve your credit score before you make your purchase. A higher credit score could help lower your interest rate and monthly payment.
• Put cash down: A down payment can help lower your monthly payment by reducing your total loan amount. The more you put down on the car upfront, the less you’ll need to borrow from the lender.
• Buy a used vehicle: Buying used could lower your monthly payment. You won’t have to worry about a new car depreciating rapidly after you drive it off the lot. Since vehicles are now more reliable and last longer, a used car is a better option than it’s ever been.
• Select a longer auto loan term: You can lower your monthly payment when you select a longer-term. But, of course, you’ll also spend more in interest over the length of the loan. You may also get charged a higher rate if you stretch out your term.
• Trade down: If you buy a car and realize it’s more than you need, you can sell it and purchase a more economical option.
• Refinance with a lower interest rate: If you already have a car loan, you may be able to lower your monthly payment through refinancing to get a lower interest rate. Even if you can only reduce your interest rate by a small percentage, the savings could add up to a fairly substantial amount.

How to Pay off Your Car Loan Early

If you pay off your car loan early, you can reduce the amount of total interest you’ll pay. Here are a few tips to help you get ahead of your loan:

• Make every monthly payment: Even if your lender will allow you to skip a payment, resist the temptation. Skipping a payment will lengthen your loan term and lead to more interest in the long term.
• Round up your payments: Rather than making the minimum monthly payment, round up your payment to repay your loan faster. For example, if your payment is $238 a month, round up to $250. Even a slight increase will add up over time.
• Make a lump sum payment each year: If you have extra cash lying around to put toward your car loan, you may want to make an additional payment. Then, you can reduce your total loan amount faster and pay off your loan more quickly.
• Pay half of your monthly payment biweekly: By paying half of your payment every two weeks, you’ll make 13 full payments per year rather than 12, and you can pay your loan off faster.

Auto Loan FAQ

Still have more questions? Check out our auto loan FAQ below for answers to some of the more commonly asked questions we receive.

How Does Your Credit Score Impact Your Auto Loan Interest Rate?

Lenders may pull your credit score from any of the three credit reporting bureaus or even all of them – TransUnion, Equifax, and Experian. Your credit score can show a lender how you’ve previously handled car financing. Lenders may look for late payments, repossessions or bankruptcies on car loans.

While your credit score matters, you can still get a car loan with shaky credit or no financing history. You should expect to pay a higher interest rate, however.

How Much Money Should You Put Down on a Car?

If your goal is to pay as little interest as possible, you may want to put down as much as you can afford. The more you put down, the less you’ll need to borrow and pay off later. If your lender requires a predetermined down payment percentage, you may want to put down this amount or a greater amount, depending on your goals, budget, and savings.

What Is the Average Length of an Auto Loan?

The average loan term for new cars is nearly 72 months. For used cars, the average loan term is about 65 months. However, you may be able to get an auto loan term as short as 36 months or as long as 84 months, depending on your lender and what you qualify for.

What Is the Average Monthly Auto Loan Payment?

For a new car, the average car loan payment is $554. The average monthly payment for a used car is $391. Today, Americans are securing car loans in greater amounts and for longer amounts of time. In total, Americans owe more than a trillion dollars in auto loan debt.

How Much Car Can You Afford?

If you’re unsure how much you can afford to spend on a car, you can take the following steps to get an idea:

• Estimate an affordable car payment: Consider the percentage of your take-home pay you’re willing to spend on your monthly payment. For example, if your after-tax monthly income is $4,000, you may be comfortable with a payment up to $400. You may also want to consider how long you can make this monthly payment.
• Calculate an affordable auto loan amount: Once you determine what an affordable monthly payment would be, you can start to estimate how much you can afford to borrow. This amount is also affected by your loan term, your credit score, and whether you are buying used or new.
• Select a target purchase price: After you know what your affordable auto loan amount is, you can determine your target purchase price. If you make a down payment or trade-in another car, you can borrow less money or purchase a higher-priced car. You’ll also want to factor in sales tax, documentation fees, and registration fees.
• Shop for a vehicle you can afford: Finally, you can start shopping for a car you can afford by using online search tools and visiting dealerships.

Contact Us at Fort Pitt Capital Group Today

At Fort Pitt Capital Group, we are a team of in-house financial advisors with expertise in wealth management, financial planning, and investment analysis. You can rest easy knowing your assets are being managed by a team that can make your money work to its highest potential within the bounds of what is best for you.

We have been around for more than 20 years. We can offer you exceptional service, transparency, and a sound investment strategy. If you are thinking about buying a car, contact us at Fort Pitt Capital Group today to explore your options.