How it works
Amount financed = vehicle price − down payment − trade-in value. The monthly payment uses M = P × r(1 + r)n / ((1 + r)n − 1) with r = annual rate ÷ 1200 and n = months. Total interest = M × n − amount financed. Total cost = all loan payments + down payment + trade-in. Sales tax, title and dealer fees are not included — add them to the price if you're financing them.
Worked examples
$35,000 car, $5,000 down, $3,000 trade-in, 7% for 60 months
Financed: $27,000.00. Monthly payment: $534.63; total interest: $5,077.94; total cost: $40,077.94.
$22,000 car, $2,000 down, no trade-in, 5.5% for 48 months
Financed: $20,000.00. Monthly payment: $465.13; total interest: $2,326.22; total cost: $24,326.22.