Auto Loan Calculator

Direct lending involves obtaining a loan from a bank or credit union before visiting a dealership, providing more flexibility in negotiating terms. Dealership financing, on the other hand, is arranged after negotiating a vehicle purchase at the dealership. The best new car loans often come from lenders other than the dealership. We recommend getting pre-approved on a loan before visiting a dealership to have a better understanding of available financing options. Our Dealer vs. Bank Financing Calculator can help you determine the best option for you.

The trade-in value is the amount a dealership is willing to pay for your current vehicle when purchasing a new one. Cleaning the vehicle, making minor repairs, obtaining multiple offers, and negotiating with the dealership can help maximize the trade-in value. The higher your trade-in value, the lower your monthly auto loan payments.

Buying a new car offers the latest features, a warranty, and often lower interest rates. However, it comes with a higher price tag, quicker depreciation, and costlier insurance. Purchasing a used car typically means a lower upfront cost, slower depreciation, and potentially lower insurance rates — though a higher interest rate on the loan. Typically, your monthly loan payments will be lower for a used car.

Consider your budget, desired features, and the trade-off between upfront cost and long-term value when deciding between a new or used car.

You can often pay off a car loan early without penalties, but make sure to check the loan terms, as some agreements may have prepayment penalties. Paying more than the minimum can help reduce overall interest payments. Getting ahead on your loan payments can also benefit you if you lose your source of income or unexpected expenses can come up, as you may be able to pause your car payments if you’re ahead (keep in mind you’ll still accrue interest).

An auto loan rebate reduces the purchase price of the vehicle by hundreds or sometimes thousands of dollars. Typically, the dealership applies the rebate toward the down payment, but sometimes it reduces the actual price of the car, which will also save you money in taxes.

Sometimes, dealerships offer you the option between a rebate and a 0 percent loan (often for a specific loan term). It’s usually harder to qualify for the 0 percent loan than the rebate. To determine whether it makes more sense to take the rebate or the 0 percent loan, use the auto loan calculator to compare your monthly payments and total interest paid for each. If you can afford the monthly payments and the interest you’ll save is more than the rebate value, you’re likely better off taking the 0 percent loan.