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This is the standard principal-and-interest amortization formula: the amount financed (price minus down payment and trade-in), the interest rate, and the term determine a fixed monthly payment. Early payments are mostly interest; later ones are mostly principal. The totals on the receipt come from simulating the loan month by month, so they match the amortization schedule to the penny.

One habit worth building: run the numbers on the out-the-door price, not the sticker. Sales tax, title, registration, and doc fees typically get rolled into the loan, which means you pay interest on them too. A "$32,000 car" is often a $35,000 loan before you've left the lot — ask for the out-the-door number and put that in the price field.

A worked example

Take the defaults: a $32,000 vehicle with $4,000 down or traded in leaves $28,000 financed. At 7.2% over 60 months, the payment is about $557 a month, with roughly $5,425 in interest — about $33,425 all-in. Stretch the same loan to 72 months and the payment drops to about $480, but interest climbs to roughly $6,565. The comparison table under the receipt runs all four terms for you every time you calculate.

That's the longer-term trap in one row: the payment falls, the total cost rises, and because cars depreciate fastest in the first years, a long loan can leave you owing more than the car is worth ("underwater" or negative equity) well into the term. If the only way a car fits your budget is a 72-month loan, that's usually the car telling you something.

Common questions

Is 0% financing real? Yes — manufacturers subsidize promotional rates, and the math here handles 0% fine (the payment is just the loan divided by the months). The catch: 0% is often offered instead of a cash rebate. Run both versions — sometimes the rebate plus a credit-union loan beats the 0% deal.

What about gap insurance? It covers the gap between what you owe and what the insurer pays if the car is totaled — relevant exactly when a long term or small down payment puts you underwater. We don't model it here; just know it's usually cheaper from your insurer than from the dealership's finance office.

Dealer financing or my own bank? Get pre-approved by a bank or credit union before you shop. Dealers can mark up the rate they pass through to you; a pre-approval turns the conversation into "beat this or I'll use it."

This is an estimate for general information, not a loan offer or financial advice. Actual rates depend on your credit and the lender. Found an error? Tell us and we'll fix it.