What APR should I expect on a car loan?

It depends mostly on your credit score, the term and whether the car is new or used. The Federal Reserve's G.19 release put the average 72-month new car loan at commercial banks at 7.17% in August 2026. Get a quote from a bank or credit union before you visit the dealer, then enter both offers here to compare them.

Is a 72 or 84 month car loan a bad idea?

A longer term lowers the payment but increases total interest, and lenders often charge higher rates on long terms. Because cars lose value quickly, a long loan also leaves you owing more than the car is worth for longer, which is a problem if you sell, trade in or the car is totaled.

What happens to the loan I still owe on my trade-in?

The dealer pays it off. If the trade-in is worth more than you owe, the difference reduces the new loan. If you owe more than it is worth, that negative equity is added to the new loan, so you pay interest on debt from the old car.

Do I pay sales tax on the full price if I trade in a car?

In most states sales tax applies only to the price minus the trade-in value, which can save hundreds of dollars. A few states tax the full price regardless of the trade-in. Add a trade-in and choose Full price under "Sales tax is charged on" if your state works that way.

Should I put more money down?

A larger down payment lowers the amount financed, the payment and the interest, and reduces the risk of owing more than the car is worth. Keep enough cash for an emergency fund, and compare the loan rate with what the cash would earn elsewhere.

How much car can I afford?

Switch the answer to Max price and enter the monthly payment you can manage, the APR, term, down payment, trade-in and local sales tax and fees. The calculator turns the payment into the largest loan it can repay, adds your down payment and trade-in equity, and removes tax and fees to give the highest vehicle price that fits. Keep insurance, fuel and maintenance in mind, since they share the same monthly budget.

Auto Loan Calculator

Your car payment with tax, fees and trade-in, or the most car a monthly budget buys.

Vehicle price$

Down payment$14.3% of the price

APR

Loan term, months

Sales tax%

Fees$

Monthly payment

$660.25

for 60 months on $32,950 financed

Loan 83%Interest 17%

Amount financed$32,950

Total interest$6,665

Sales tax$2,450

Total cost$44,615

Interest adds $6,665, 20% on top of the $32,950 you borrow.

Sales tax%

Fees$

Try an example

Currency symbol

Loan-to-value

Under 100%: you owe less than the priceOver 100%: you owe more than the price

Your loan-to-value: 94.1%
CFPB average, positive trade-in: 88.9%
CFPB average, no trade-in: 101.6%
CFPB average, negative equity: 119.3%

What it means. Loan-to-value is the amount financed divided by the price. Over 100%, you owe more than the car is worth before you drive it away. Averages from the CFPB's 2024 report on negative equity, loans from 2018 to 2022.

Term against total interest

Drag the handle to change the term

At 7.5% for 60 months you pay $6,665 in interest. The other offer, 5.9% for 72 months, costs $6,256. At 84 months your interest would be $9,503. Drag the handle or pick a term to change yours.

Payment at each term

Term	Payment	Total interest
36 mo	$1,024.95	$3,948
48 mo	$796.69	$5,291
60 mo (yours)	$660.25	$6,665
72 mo	$569.71	$8,069
84 mo	$505.40	$9,503

Compare another offer

Other offer's APR%

This offer$660.25Interest $6,665

Other offer$544.52Interest $6,256

The other offer saves $409 in interest and lowers the payment by $115.73.

Deal summary

Vehicle price: $35,000.00
Sales tax (7%): + $2,450.00
Fees: + $500.00
Down payment: − $5,000.00
Amount financed: $32,950.00
APR and term: 7.5%, 60 months
Monthly payment: $660.25
Total interest: $6,665.02
Total of payments: $39,615.02
Total cost of the car: $44,615.02

If the APR were different

APR	Payment	Total interest
5.5%	$629.38	$4,813
6.5%	$644.70	$5,732
7.5% (yours)	$660.25	$6,665
8.5%	$676.02	$7,611
9.5%	$692.01	$8,571

If you put a different amount down

Down	Payment	Total interest
$0	$760.44	$7,676
$3,500	$690.31	$6,968
$5,000 (yours)	$660.25	$6,665
$7,000	$620.17	$6,260

Same car, tax, fees and term; only one input changes in each table.

Year-by-year schedule

	Still owed	Principal
1	$27,307	$5,643	$2,280
2	$21,226	$6,081	$1,842
3	$14,672	$6,553	$1,370
4	$7,610	$7,062	$861
5	$0	$7,610	$313

Before you rely on this result. This is an estimate for planning. Banks, lenders and other providers apply their own rules, fees and rounding, so confirm figures with them before you commit to a financial decision. Sources used on this page.

How it's worked out

The payment starts from the amount you finance, not the sticker price. Tax and fees are added, and your down payment and trade-in come off:

\displaystyle A

Here $E$ is your trade-in equity: what the dealer pays for your old car minus what you still owe on it. If you owe more than it is worth, $E$ is negative and the old debt is added to the new loan. In most states sales tax is charged on the price minus the trade-in value.

The monthly payment then comes from the level-payment formula, with $r$ the APR divided by 12 and $n$ the number of months:

\displaystyle M

Max price mode runs this backward. Your budget, APR and term fix the largest $A$ you can repay. The tool then adds your down payment and equity, takes off fees and divides out the sales tax to find the highest price.

Worked examples

Rosa buys a new SUV

Rosa agrees a price of $35,000 and puts $5,000 down. Sales tax at 7% is $2,450.00 and fees are $500, so she finances $32,950. At 7.5% for 60 months her payment is $660.25 and she pays $6,665.02 in interest.

The dealer offers 72 months instead. The payment drops to $569.71, but interest rises to $8,069.06. Open this example in the tool

Tom trades in a car he still owes on

Tom's old car is worth $8,000, but he still owes $11,000 on it. He buys a $32,000 car with no cash down at 8% for 72 months. The $3,000 gap is added to his loan, so he finances $37,180 and pays $651.89 a month.

His loan-to-value is 116%. He owes more than the new car's price on day one. Open this example in the tool

Aisha shops with a budget

Aisha can pay $450 a month for 60 months at 7.5%, with $2,000 down. That payment repays $22,457. After 7% tax and $500 of fees, the most she can spend on the car is $22,390. Open this example in the tool

Reading your result

The payment covers the loan only. Insurance, fuel and upkeep come out of the same budget, so leave room for them.

Look at total interest before you pick a term. On Rosa's loan, going from 48 to 84 months cuts the payment by $291.30 but adds $4,212 of interest. Lenders often charge a higher APR on long terms too, so the real gap can be wider.

Check the loan-to-value card. Above 100%, you owe more than the car is worth before you leave the lot, so a sale or a write-off may not clear the loan. In the CFPB's 2024 study of loans from 2018 to 2022, loans with negative equity rolled in averaged 119.3% loan-to-value and 73-month terms. Those borrowers were more than twice as likely to have the account assigned to repossession within two years as buyers with a positive trade-in.

The trade-in tax credit matters. With a $10,000 trade-in on Rosa's car, tax on the difference is $1,750.00. In a state that taxes the full price it is $2,450.00.

Common mistakes

Shopping by payment alone. A dealer can hit any payment by stretching the term. Agree the price first, then compare offers by APR, term and total interest.
Leaving out tax and fees. Sales tax and title, registration and dealer fees can add thousands. If they are financed, you also pay interest on them.
Forgetting the old loan. If you still owe on your trade-in, enter the amount. Leaving it out makes the new loan look smaller than it is.
Financing add-ons without noticing. Service plans, gap cover and warranties sold at signing raise the amount financed. Ask for the price of each and add it to the fees if you keep it.
Comparing a rebate with a low rate by payment. Makers often offer cash back or a low APR, not both. Run each deal here, the rebate as extra down payment, and compare total cost.

Questions people ask

Sources

Maintained by Anil ShahUpdated October 28, 2026Checked against 12 reference values

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