Compare Loan Terms
Amortization Schedule
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How to Use This Calculator
Run these numbers before you visit a dealership so you can negotiate instead of accepting their terms.
- Look up the market value on Edmunds, KBB, or TrueCar first.
- Get pre-approved from your bank or credit union. Dealers markup rates and keep the difference.
- Try different scenarios - new vs used, various down payments, different loan lengths.
- Get trade-in quotes from Carvana and Carmax before you go.
- Don't mention your trade-in until after you've locked in the purchase price.
- Check your state's sales tax rate. It adds thousands to what you'll finance.
- Expect dealer fees around $300-$800. Challenge anything labeled "doc fee" over $500.
- Compare loan terms here. A 72-month loan costs way more in interest even if the monthly payment looks better.
- Negotiate the out-the-door price, not the monthly payment.
Key Factors in Auto Loans
Your monthly obligation covers principal and interest only - not insurance, gas, or maintenance. Cars lose 15-25% of their value in year one.
Total Loan Amount: This is what you're actually financing after your down payment, trade-in, taxes, and fees. Interest gets calculated on this number. Financing more money keeps you underwater longer since cars lose value faster than you pay down the balance.
Sales tax is calculated on vehicle price minus trade-in value. This tax gets rolled into your loan, so you pay interest on it too.
When you owe more than your trade-in is worth, that's negative equity. Say your car's worth $8,000 but you still owe $10,000 - that $2,000 difference gets added to your new loan. You're paying for a car you already traded in. If you total the car, insurance pays market value, not your loan balance, and you're stuck with the difference.
Financing $35,000 for 72 months at 6% APR? You'll pay $6,800 in interest while the car drops $7,000+ in value the first year. Cars lose value fast. Shorter terms and bigger down payments help.
If you put down less than 20%, rolled in negative equity, or took a loan over 60 months, you need gap insurance. It covers the difference between what you owe and what the car's worth if it gets totaled. Your car insurance company sells gap coverage for about $20/year. Dealers charge $700 or more for the same thing.
Auto Loan Tips
- Don't mention your trade-in until you've locked in the purchase price.
- Credit unions beat dealer rates. Get pre-approved first.
- New cars drop 20-30% in value the second you drive off. Consider 2-3 year old certified pre-owned instead.
- Skip dealer warranties - they charge $2,000-$4,000 for coverage you can buy from third-party providers for half that. Buy it later if you want it, not during the high-pressure signing when they're pushing add-ons.
- Focus on out-the-door price.
- Check your credit score first.
- Skip paint protection, fabric protection, VIN etching, nitrogen fills.
- When they say "let me talk to my manager," give them 10 minutes max.
- Negotiate total price, not monthly payment.
- Read everything before signing. Finance office loves to slip in extras you never agreed to.
- Skip loans over 60 months.
- Put down at least 20% to avoid being underwater for years - with less down, you'll owe more than the car is worth until year 3-4 of a 5-year loan, which traps you if you need to sell or trade in early.
Dealer Tactics to Avoid
Car dealers focus on monthly payments instead of total price, confuse you with four-square worksheets, and wear you down through exhaustion.
Monthly Payment Trap
Negotiate out-the-door price only. They'll ask what monthly payment you can afford, then extend the loan to hit that number while jacking up the total price. A $30,000 car at $500/month for 60 months becomes $35,000 at $500/month for 70 months - you pay $5,000 extra without noticing.
The Four-Square Worksheet and How It Works
Salesperson draws a box with four squares: car price, trade-in, down payment, monthly payment. They move numbers around between boxes to confuse you - one goes down, another goes up, and you lose track fast.
Negotiate one thing at a time: purchase price first, then financing, then trade-in value.
Yo-Yo Financing Scam
You drive home with the car. Three days later they call - "your financing fell through, come back and sign new paperwork with a higher rate or return the car." Usually it's planned. They know you're attached to the car now. Never take delivery until financing is 100% locked in writing.
Trade-In Lowball
Get offers from Carmax and Carvana before you negotiate.
Don't mention your trade until the purchase price is locked in.
This prevents the classic bait-and-switch where you get a great price on the new car, then they lowball your trade-in to make up the difference.
"We'll do $25,000 on the car [sounds great!] but only $6,000 for your trade [terrible!]."
Surprise Fees at Signing
The finance contract includes mystery fees you never agreed to: doc fees that run $800, dealer prep around $500, VIN etching for $300, market adjustments up to $2,000. Challenge every fee. Only three fees are legit: sales tax, title, and registration.
Why Does the Manager Take So Long?
Give them 10 minutes max. The salesperson keeps "checking with the manager" on your offer, but usually they're just making you wait or deciding how to counter. The manager might not even know about your offer.
The Waiting Room Strategy
They keep you there 4-5 hours - test drives, waiting for managers, reviewing numbers, more waiting. By hour four you're exhausted and agree to anything just to leave.
Shop at month-end when they need sales, set a 90-minute limit, and be ready to walk out.
Finance Office Add-Ons
After you agree on the car price, the finance manager pushes warranties, gap insurance, paint protection, maintenance plans. "What if your transmission dies?"
Just keep saying no - these have 50-80% profit margins.
If gap insurance makes sense for your situation, your regular car insurance company sells it for $15-25/year instead of the $700 the dealer charges.