🔑 Car Loan Calculator
Monthly payments for auto financing
How it works
A car loan calculator turns the sticker price into the number that actually matters: your monthly payment, plus how much interest you will pay over the life of the loan. Enter the vehicle price, your down payment or trade-in value, the interest rate, and the term, and it shows the payment, the total amount repaid, and the total interest — the three numbers every buyer should know before signing.
The down payment matters more than people think. It reduces the amount financed, which lowers both the payment and the interest, and it protects you from owing more than the car is worth as it depreciates. In Canada, sales tax (GST/HST/PST depending on your province) is charged on top of the sticker price.
The formula
Monthly payment = L × [r(1+r)^n] ÷ [(1+r)^n − 1], where L is the amount borrowed, r is the monthly interest rate (annual rate ÷ 12), and n is the number of payments. Total repaid = monthly payment × n, and total interest = total repaid − L. Stretching n lowers the payment but raises the interest — the fundamental trade-off.
Worked example
A $28,000 car with a $3,000 down payment leaves $25,000 to finance. At 6.99% over 60 months: r = 0.0699 ÷ 12 ≈ 0.005825, n = 60. The payment works out to about $495 per month. Total repaid: $495 × 60 = $29,700, so the interest costs roughly $4,700. Extend the same loan to 84 months and the payment drops to about $377 — but total interest climbs past $6,600.
Frequently asked questions
Is a longer term better because the payment is lower?
Not really — you pay thousands more in interest, and you stay "upside down" (owing more than the car is worth) much longer. The sweet spot for most buyers is 48–60 months.
Do biweekly payments save money?
Yes, slightly. Paying half the monthly amount every two weeks makes 26 half-payments a year — the equivalent of 13 monthly payments — so you chip an extra payment off the principal each year.
Should I include the sales tax in the loan amount?
Usually you have to: tax is due on the full price whether you pay cash or finance. In Ontario that is 13% HST on top of the price, so budget for it either as a bigger down payment or a bigger loan.