Car Loan Calculator
Calculate your auto loan payments and see the true cost of your vehicle.
Typical Rates by Credit Score
Depreciation Reality Check
| Year | Value | Lost |
|---|---|---|
| Year 1 | $28,000 | -$7,000 |
| Year 2 | $23,800 | -$4,200 |
| Year 3 | $20,944 | -$2,856 |
| Year 4 | $18,850 | -$2,094 |
| Year 5 | $17,342 | -$1,508 |
Depreciation estimates are for reference only. Actual values vary by brand, model, condition, and market.
You May Also Like
Related Articles
Car Loan Basics
A car loan (or auto loan) is money borrowed to purchase a vehicle. Unlike a house, cars lose value quickly โ this is called depreciation.
Your monthly payment depends on:
- Vehicle price (minus trade-in and down payment)
- Interest rate (based on credit score)
- Loan term (24-84 months)
- Sales tax (varies by state)
Cars are the #1 worst "investment" most people make. A new car loses 20% of its value the moment you drive it off the lot!
Fun Facts ๐
๐ The Drive-Off Depreciation
Buy a $35,000 new car:
- Drive off lot: Worth $28,000 (lost $7,000 instantly!)
- After 1 year: Worth $24,500
- After 5 years: Worth $12,000
You lost $23,000 in 5 years โ that's $383/month just in depreciation!
๐ธ The 7-Year Loan Trap
To lower payments, many people choose 72-84 month loans:
| $35,000 car at 7% | 48 months | 72 months |
|---|---|---|
| Monthly Payment | $838 | $587 |
| Total Interest | $5,232 | $7,272 |
| Underwater for | 1-2 years | 3-4 years |
"Underwater" = you owe more than the car is worth!
๐ New vs Used: The Math
| Factor | New Car | 3-Year-Old Used |
|---|---|---|
| Price | $35,000 | $20,000 |
| Depreciation Year 1 | -$7,000 | -$2,000 |
| 5-Year Total Loss | -$23,000 | -$10,000 |
Used car saves $13,000 in depreciation alone!
๐ The 20/4/10 Rule
Financial experts recommend:
- 20% down payment minimum
- 4 years (48 months) maximum term
- 10% of income maximum for total car costs
For a $35,000 car:
- Minimum down: $7,000
- Max monthly: Based on your income
Hidden Costs of Car Ownership
Your car costs WAY more than the payment:
| Cost | Monthly Estimate |
|---|---|
| ๐ฐ Loan Payment | $500-700 |
| โฝ Gas | $150-300 |
| ๐ก๏ธ Insurance | $100-200 |
| ๐ง Maintenance | $50-100 |
| ๐ Registration | ~$25 |
| ๐ธ Depreciation | $300-500 |
| Total True Cost | $1,125-1,825/mo |
Smart Car Buying Tips
1. Buy Used (2-3 years old) Let someone else pay for the biggest depreciation hit.
2. Get Pre-Approved First Know your rate before going to the dealer. Dealers make money on financing!
3. Keep Term Under 48 Months Longer terms = paying interest on a depreciating asset.
4. Put at Least 20% Down Avoid being "underwater" on the loan.
5. Consider Total Cost of Ownership A "cheap" car with high insurance and gas costs isn't cheap.
6. Never Finance Extras Extended warranties, gap insurance, etc. โ either pay cash or skip them.
The smartest move? Buy a reliable 3-year-old car with cash. No loan, no interest, minimal depreciation. The rich often drive older cars โ that's part of how they got rich!