Auto Loan Calculator & Car Lease Calculator with Instructions

by Scott Oldham

Before you buy or lease your next car, it’s important to use this auto loan calculator to learn your ideal monthly payments and calculate the other financial terms and aspects of the deal. This car loan calculator can help you estimate the terms of an auto loan, calculate your down payment and better understand the costs of buying vs. leasing.
Estimated Total Cost
(including taxes and interest)
Vehicle Price
Cash Down Payment
Trade-In Value
Tax Rate

Using this online auto loan calculator is free and easy, and it takes just a few minutes. The car loan calculator on AutoGravity, for instance, will help you better understand your credit, the key factors involved in calculating monthly car-loan payments, and how to think about what's affordable.
Online car loan calculators can also help you estimate the monthly payments for a new car lease. They’re a wonderful tool that can ultimately save you money and time on your next new car purchase.
"Before I made the deal and leased my new Volkswagen, I used an online car loan calculator, and it was very helpful," says Greg, a father of two who lives in upstate New York. "It was quick and easy and helped me save thousands of dollars. Most importantly, it kept me from leasing a car I couldn’t afford."
Like Greg, you'll also benefit by using an auto loan calculator, whether you plan to buy or lease. Here we'll explain the process and answer some important questions.
Before you use an auto loan calculator, it’s important to know the MSRP meaning and the sticker price of the car, truck or SUV you’re interested in purchasing. Also, it’s best to know the answer to the question What's the best time to buy a car?
Savvy car shoppers know that the right timing can save you money, as dealers are more inclined to sell cars for less at certain times of the year, certain days of the week or month.
Some car shoppers are concerned about privacy when using an auto loan calculator, like the one on AutoGravity, but they shouldn’t be. Your financial information is safe. It won’t be sent to anyone or saved, and its security is protected.
"Before I used the AutoGravity car loan calculator, I was worried about the privacy of my finances, but it wasn’t a problem," says Greg. "I'm going to use it again the next time I buy or lease a new car. With the information it provided me, I felt like I knew how to negotiate a car deal like a leasehackr."

What are the key inputs of an auto loan calculator?

When using an auto loan calculator, which is similar to a mortgage calculator, you will be asked to input key information and financial factors, so the terms of your new car lease or purchase can be calculated properly. There are eight key inputs:
  1. Vehicle Price: This is either the vehicles MSRP or a lower transaction price you’ve already negotiated. Remember that the MSRP excludes destination fees, taxes, title, registration, preparation and documentary fees, tags, labor and installation charges, insurance, optional products, equipment or packages and accessories.
  2. Cash Down Payment: This is amount you plan to pay upfront. Most car loan calculators assume a 20 percent down payment, but most cars can be bought with less. For many consumers with excellent credit scores, 0 percent down may be an option.
  3. Trade-In Value: This is not a required input on a quality car loan calculator, as many deals are made without a trade-in. If you’re not trading in a used car on the new car, simply put $0.
  4. Tax Rate: This is important if you expect the car loan calculator to be accurate. Go online and find the sales tax rate in your area. It will be a single digit percentage, like 7 percent.
  5. Term: It’s also important to select the duration of your loan. The fewer number of months will usually cause the monthly payment to increase. Most auto loan calculators will allow you to choose between 12 and 84 months.
  6. APR: This is sometimes referred to as the money factor or loan rate. It also comes into play when buying a house and shopping for a low interest rate mortgage. If you’re prequalified for a loan from a lender, then you already know the APR of your loan. If you’re not prequalified, input several annual percentage rates, ranging from 0.0 percent to 9.9 percent and see how it affects your possible monthly payment.
  7. The AutoGravity car calculator tool will help you calculate a lease. The lease calculation will ask you for two other important pieces of information: Annual Mileage and Residual Value.
  8. Annual Mileage: This the total number of miles allowed by a lease before additional charges, usually $.20 a mile is imposed. It can range anywhere from 7,500 miles to 20,000. To choose, you should have a good understanding of how many average miles you drive each year. Higher mileage leases usually cost more, because they reduce the vehicle’s equity.
  9. Residual Value: This is the estimated value of the leased vehicle at the end of the lease. It’s always displayed as a percentage, like 55 percent, and it’s determined by the vehicle’s mileage. Remember, it’s just an estimate. Buyers should also know that used-car prices fluctuate with the ebb and flow of the market and are often based on a particular model’s historic resale values.

What does APR mean?

APR stands for annual percentage rate. It’s the annual rate charged for borrowing money from a financial lender like a bank to pay for your new car. APR is a percentage of the annual cost of the funds you’ll be charged for each year of the loan. Sometimes, it’s referred to as interest.
Your credit rating does affect your ability to borrow money at a lower APR. The higher or better your personal credit rating makes you a more attractive customer to dealers and financial lenders. And, it improves your ability to borrow money at a lower APR.
Those with a very high credit rating can usually qualify for loans with an APR as low as 0.0 percent, which means there isn’t any interest on the loan. However, most customers will qualify for very low interest rates such as 0.9 percent or 1.9 percent. Consumers with low credit scores will pay more, maybe as high as 10 percent.
Here are six other terms that are important to understand to better utilize a car loan calculator:
  1. Term: This is simply the length or duration of your car loan or lease. This determines how many monthly payments will be required to pay back the loan. Most are between 36 and 72 months; however, there are other options.
  2. Tax Rate: This is the sales tax you will be required to pay when you purchase or lease a new or used car. Tax rates vary by geographical location and are different from state to state and even county to county. Usually tax rates range between 2 percent and 9 percent.
  3. If you purchase or lease a new car in a different state, you will pay the sales tax in the state and county you register the vehicle. To calculate the amount of your sales tax, simply multiply the sticker price of your vehicle by the sales tax percentage in your location.
  4. Trade-In Value: This is often referred to as trade-in price. It’s simply the amount of money a dealer offers you for your used car or truck.
  5. Because the value of the trade-in vehicle will be applied to the overall cost of the new car —and will lower the amount of money financed — it’s important to know the approximate value of your trade-in before using a car loan calculator. Used-car values are easily found online at websites like AutoGravity.
  6. Financing: This is the amount of money borrowed to pay for the car. Financing is usually paid back in monthly installments. The amount financed does not include any down payment of funds paid upfront.
  7. For instance, if you’re buying a car that costs $25,000 and you put $2,500 down or 10 percent, you’ll be financing the remaining 90 percent of the car’s price, or $22,500.
  8. Refinance: If you already have a loan, it may be possible to refinance that loan and secure a lower APR loan rate. This may be due to certain factors, including the betterment of your credit rating or the lowering of the federal interest rate, which is then passed on from financial institutions to consumers.
  9. Refinancing a loan to another with a lower APR will lower the monthly payment and save you money. It will also lower the overall cost of buying the vehicle. Since the term will restart, it’s also an opportunity to shorten or extend the term of the debt.
  10. Credit Rating: Most everyone has a credit rating, which is also known as a credit score. Creditors, including banks, credit unions and other lenders, use your credit rating to determine how likely you’ll pay back the money you want to borrow. The higher or better your credit score, the easier it is to borrow money. And, the higher or better your credit score, the lower your annual percentage loan rate.
  11. There are many ways to check your credit rating online, and it should be free. A low credit score is between 300 and 620, while the highest scores range from 740 to 850.

How do you calculate payments?

The most accurate way to calculate your monthly payments is to go through a loan-application process like the one offered by AutoGravity. It will quickly give you an accurate idea of how much you can afford and the amount of your monthly loan payments.
Estimating your monthly payment on a new car loan or lease is best accomplished with an online car loan calculator. It will subtract your down payment and possible trade-in value from the sticker price of the vehicle. It will then add your tax rate and APR and divide the total by the number of months of your loan term.
Find time to use a quality car loan calculator, like the one on AutoGravity, which provides a valuable financial service. It will not only tell you the amount of each monthly payment, but also the total estimated cost of the car, including tax and interest, as well as the total amount of interest paid over the duration of the loan or lease.
If you’re using the loan calculator tool to calculate a lease payment, it’ll show you the estimated monthly payment, Depreciation Charge, Rent Charge and taxes. Such a detailed breakdown of the money involved is a great help.
Whether you’re buying or leasing, you should always know how much you could afford to pay each month. An auto loan calculator is a great tool to start with that financial reality in mind and be able to play with the numbers to determine the sticker price of the car you can afford.
For instance, if you can afford a $500 monthly payment, and your desired Genesis sedan or Audi A4 has a sticker price of $45,000, the car loan calculator will allow you to determine the necessary down payment and other financial factors needed for you to afford that particular vehicle.
If the numbers don’t add up, you’ll realize a sedan with a lower sticker price, like a Hyundai Sonata or an Audi A3, may be right for you. Think of a car loan as business decision.
Also, before buying or leasing a new car, always consider and calculate the other costs involved with vehicle ownership, including insurance, service and fuel expense.

What's the difference between a loan and a lease?

An auto loan is a financial contract in which money is borrowed to purchase a vehicle. The loan is paid back in full, including interest at an agreed upon APR, over the term of the loan. Leasing is a rental agreement, in which the leasee pays for the portion of the vehicle used over the term of the lease.
At the completion of the terms of an auto loan, you remain in possession of the vehicle and you own any equity held within its value. At the termination of a lease, the vehicle is usually returned to its original place of sale. However, a leased vehicle can be purchased by a third party or by the leasee at any time at a determined buyout price.
The buyout price is the total of the remaining payments due on the lease plus the residual value of the vehicle. It is possible to finance the buyout value of a leased vehicle; however, it’s rarely financially beneficial to do so.
Buying a car or truck has four advantages.
  • At the end of the loan term you will own the vehicle and will be able to continue driving it without the cost of a monthly payment.
  • Buying, unlike leasing, comes with no mileage limits. You own the car and can drive it as many miles as you would like without being hit with further mileage charges.
  • Buying a car allows you the freedom of modifying and personalizing the vehicle if you desire. Leased vehicles must be returned in stock form, or there will be penalty fees to pay.
  • Once you own the vehicle, its value belongs to you; it can be applied to your next new car purchase, either through a private sale or in the form of its trade-in value.
Leasing a car or truck also has four advantages.
  • Usually a lease has a lower monthly payment than a car loan, which may allow you to afford a fancier trim level or a car from a luxury brand.
  • This is especially true if you drive fewer miles each year than the average American. Usually standard new car leases limit average annual mileage to between 10,000 and 12,000 miles. If this is enough for your lifestyle, leasing may be the right option.
  • For many consumers, including small business owners and self-employed individuals, leasing a car has tax benefits over owning. Businesses can deduct lease payments as an expense; in most states, you’ll pay less sales tax if you lease. Go online and check your state tax laws to see if this applies to you and your location.
  • Most leases have a term of three to four years, while many car loans are paid in 60 to 72 months. Many consumers lease a new car every three or four years and get to enjoy the latest models, safety and technology. They will never own a high mileage vehicle and deal with the repairs and problems usually associated with older cars and trucks.

How do you get pre-qualified to avoid overpaying?

For most new-car buyers, applying for a car loan at the dealership can cost you more money. Instead, it’s best to get preapproved for a loan and secure your financing at the best rate possible before you begin to negotiate the price of the car. This will give you more control over the deal, and you’ll avoid paying too much.
Getting pre-qualified for a car loan is much easier than you think. Submitting a loan application on takes just a few minutes, and you’ll be pre-approved for a loan instantly. Numerous lenders will process your application immediately, and you’ll see up to four of the best offers.
Most advertised low-interest rates are usually reserved for customers with the best credit. If your credit score is below 750, you should expect to pay a higher rate.
When you’re approved for a loan, the lender will tell you the total number of dollars you can spend on the car and your pre-qualified interest rate. With this paperwork in hand, negotiate the price of your new car accordingly. Just remember, it’s best to tell the dealer you’re pre-approved up front; however, the salesman doesn’t necessarily need to know for how much.

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