Car Loan Calculator 2026

In 2026, average auto loan rates are approximately: new car, excellent credit (750+): 5.5–7% APR. New car, good credit (700–749): 7–9% APR. New car, fair credit (650–699): 10–14% APR. Used car rates run 2–4% higher than new car rates for the same credit tier. Rates from credit unions are typically 1–2% lower than bank rates. If your dealer offers 0% APR financing, calculate whether the cash rebate alternative (if offered) actually saves more over the loan term.

Aim for at least 10–20% down on a new car and 10–15% on a used car. The key reason: cars depreciate rapidly — a new car loses 20–30% of value in the first year. Without enough down payment, you risk being 'underwater' (owing more than the car is worth), which creates problems if you need to sell or the car is totaled. A larger down payment also reduces the loan amount, your monthly payment, and total interest. For a $35,000 new car, $5,000–$7,000 down is a reasonable starting point.

Long car loans (72–84 months) keep monthly payments lower but cost significantly more in total interest and leave you 'upside down' for years. On a $35,000 car at 7.5% APR: 60 months = $700/mo, total interest $7,019. 72 months = $599/mo, total interest $8,114. 84 months = $527/mo, total interest $9,282. You'll also likely still be paying for the car when it needs major repairs. If you need a 72+ month loan to afford the payment, the car may be out of your budget.

Your trade-in value is what the dealer pays for your old car — it reduces the amount you need to finance. If your car is worth $8,000 trade-in and you're buying a $35,000 car: you only need to finance $27,000 (before taxes and fees). This lowers your monthly payment and total interest. Get at least 3 trade-in quotes (CarMax, KBB Instant Cash Offer, Carvana) before negotiating with the dealer — dealers sometimes undervalue trade-ins to profit on both the new car sale and your old car.

In most states, sales tax applies to the full vehicle purchase price (or the price minus trade-in in some states). On a $35,000 car in a state with 8% sales tax: you owe $2,800 in tax. If this is rolled into the loan, you're financing $37,800 (plus fees) — paying interest on the tax amount too. Some states (e.g., Montana, New Hampshire, Oregon, Delaware) have no sales tax. Sales tax treatment of trade-ins varies by state — some states only tax the difference between the new car price and trade-in value.

Common car buying fees: dealer documentation fee ($100–$800, varies widely by state), title and registration ($50–$200+), DMV fees ($50–$300), destination charge (built into MSRP, $1,000–$1,500 for new cars), and dealer add-ons (extended warranty, paint protection, GAP insurance — many are negotiable or overpriced). GAP insurance from a dealer averages $400–$900 but you can buy it from your auto insurer for $20–$40/year. Always ask for an itemized out-the-door price before signing.

Get pre-approved through your bank or credit union before visiting the dealership — this gives you a benchmark rate and negotiating power. Dealers often mark up the rate they offer (called the 'dealer reserve') and keep the difference as profit. Bring your pre-approval to the dealer: if they can beat it, great; if not, use yours. Credit unions typically offer the lowest rates. If the manufacturer offers 0% APR promotions, compare that against any cash rebate alternative — a $2,000 rebate on a $35,000 car financed at 5% may save more than 0% financing with no rebate.

GAP (Guaranteed Asset Protection) insurance covers the 'gap' between what you owe on your car loan and what your auto insurer pays if the car is totaled or stolen. New cars can depreciate $5,000–$10,000 in the first year, creating a gap if your down payment was small. GAP is most important when: you financed 80%+ of the vehicle, your loan term is 60+ months, or you rolled negative equity from a previous loan. If you need it, buy from your insurer (typically $20–$40/year) rather than the dealer ($400–$900). Drop it once your loan balance is less than your car's market value.