Used Car Loan Calculator

The loan math for a used car is identical to a new one, but the asset is different in two ways that should drive every choice on this page. The car has already absorbed its steepest early depreciation, which helps your equity. And it has fewer years of reliable service left, which means the loan term has to be measured against the car's remaining life rather than against the lowest payment a lender will offer. A used car financed for longer than it will run well can leave you paying for a vehicle you have already replaced.

This page runs the same engine as the main auto loan calculator. The presets use one illustrative car, a four year old vehicle priced at $19,500, so the term and the repair budget are the variables. The 8.5 percent rate is an illustrative input; used car rates vary with the lender, your credit, and the age and mileage of the vehicle, so enter the APR from your own approval.

Every row finances the same $20,230.00 at the illustrative 8.5 percent.

Going from 48 to 72 months saves $138.98 a month but adds $1,960.79 of interest and puts the last payment in the car's tenth year, when larger repairs become more likely. A 36 or 48 month term keeps the loan inside the stretch of the car's life you can reasonably plan around and leaves debt-free years afterwards, which is where most of the savings from buying used come from.

For comparison, an illustrative $32,000 new car with the same $2,500 down, $695 fees and 13 percent tax, financed at an illustrative 6.9 percent over 60 months, means $34,355.00 financed, a $678.65 payment and $6,364.03 of interest. Even if the used loan carries a higher rate, the smaller balance usually wins on interest: the 48-month used loan above costs $3,704.49. A newer car may still make sense if it saves on repairs or comes with warranty coverage you value, so include your repair reserve and expected years of ownership when comparing. The car affordability calculator and the how much car can you afford guide help set the ceiling first.

1. Signing before an independent inspection. A pre-purchase inspection and a vehicle history report cost little next to a loan on a car with hidden problems.
2. Stretching the term past the car's useful life. Check the age-at-payoff column before choosing a term.
3. Budgeting the payment without a repair reserve. Older cars need tires, brakes and repairs; leave room for them each month.
4. Assuming the dealer rate is the only option. Banks and credit unions lend on used cars too, though some set limits on vehicle age or mileage. Get a pre-approval to compare.
5. Financing an extended warranty without pricing it. If you want one, compare its cost against your own repair reserve and avoid paying interest on it for years. If you have a trade, the trade-in loan calculator shows its effect separately.

Pick the car first and verify its condition. Then choose the shortest term whose payment plus repair reserve fits your monthly budget, and check that the car's age at payoff is within the period you expect to drive it. If the only term that fits runs into the car's second decade, look at a cheaper car or a bigger down payment rather than a longer loan. Finally, compare at least two lenders on APR and total interest for the same amount and term.