🚗 Auto Loan Calculator

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Compare Loan Terms

Shorter terms save interest but have higher monthly payments.

How Auto Loans Work

An auto loan is a secured installment loan — you borrow money to buy a car, and the vehicle serves as collateral. The loan is repaid in equal monthly payments over the loan term (typically 36–84 months). Each payment covers both principal (reducing your loan balance) and interest (the cost of borrowing).

2026 Average Auto Loan Rates

Credit ScoreNew Car (Avg)Used Car (Avg)
781–850 (Super Prime)5.0%–6.5%6.5%–8.0%
661–780 (Prime)6.5%–8.0%8.0%–10.0%
601–660 (Near Prime)9.0%–12.0%11.0%–15.0%
501–600 (Subprime)13.0%–18.0%16.0%–21.0%
300–500 (Deep Subprime)18.0%–25.0%+20.0%–28.0%+

How to Save Money on Your Auto Loan

  1. Improve your credit score before applying: Even a 50-point increase can save thousands over the loan term.
  2. Make a larger down payment: Putting 20% down gets you better rates and avoids being "upside down" (owing more than the car is worth).
  3. Choose the shortest term you can afford: A 60-month loan costs significantly less in total interest than an 84-month loan, even with the same rate.
  4. Get pre-approved before visiting the dealer: Dealers often mark up the interest rate. Having a pre-approval from your bank or credit union gives you negotiating power.
  5. Don't focus only on the monthly payment: Dealers may extend the loan term to lower your payment, but you'll pay far more in total interest.

New vs. Used: Which Loan Is Right?

New car loans typically have lower interest rates, but new cars depreciate faster — losing about 20% of their value in the first year. Used cars have higher rates but a lower purchase price. A used car that's 2–3 years old often offers the best value, as the steepest depreciation has already occurred.

What APR Really Means on an Auto Loan

APR (Annual Percentage Rate) includes both the interest rate and certain fees, giving you a more accurate cost of borrowing. Always compare APRs between lenders, not just the interest rate. A 7% loan with $1,000 in fees has a higher APR than an 7.5% loan with no fees.

Frequently Asked Questions

What's a good interest rate for an auto loan in 2026?
For new cars, a good rate is around 6–8% for buyers with good credit (661+ score). Rates vary significantly by credit score, loan term, and whether the car is new or used. Always shop around — rates can vary by 2–4 percentage points between lenders.
Should I finance for 72 or 84 months?
Longer terms lower your monthly payment but cost much more in interest. On a $35,000 loan at 7.5%, the total interest is about $7,100 over 72 months vs. $8,600 over 84 months. If you can afford the higher payment, choose the shorter term. Also consider that cars depreciate faster than you pay down the loan on long terms, leaving you "upside down."
Is it better to lease or buy?
Leasing offers lower monthly payments and lets you drive a new car every 2–3 years, but you build no equity. Buying builds equity and has no mileage limits. Leasing makes sense if you drive less than 12,000 miles/year and like driving new cars. Buying makes sense if you keep cars for 6+ years or drive a lot.
Can I pay off my auto loan early?
Most auto loans allow early payoff without penalty, but check your contract. Paying off early saves interest and frees up cash flow. Some lenders charge a prepayment penalty (usually limited to the first 1–2 years), so review your loan agreement first.