Monthly payment, total interest and the trade-in/negative-equity math
| Term | Payment | Total interest | Underwater until ~ |
|---|
The car payment is where dealerships win: negotiate the monthly number and the term quietly stretches to 84 months, the negative equity rolls in unseen, and a $32,000 car becomes $45,000 of payments. This calculator computes the payment from the deal's actual parts — price, tax, down payment, trade equity (or its absence) — and shows the term table dealers won't: what each extra year of loan costs in interest and in underwater months.
| Credit tier | New car APR | Used car APR |
|---|---|---|
| Super prime (720+) | ~5.5–7% | ~7–9% |
| Prime (660–719) | ~7–9% | ~9–11.5% |
| Near prime (620–659) | ~9.5–12% | ~12–15% |
| Subprime (<620) | ~12–15%+ | ~16–21%+ |
Two moves worth hundreds: get pre-approved by a credit union before the dealership (their finance office then has to beat a real number, and CU auto rates routinely undercut captive lenders except during promotional 0–2.9% manufacturer offers), and check your tier first with the Credit Score Estimator — one tier is worth 2–3 APR points.
Longer terms sell cars by shrinking payments while growing everything else. On the default $30k financed at 7.5%: 48 months costs ~$4,800 of interest; 84 months costs ~$8,700 — and leaves you owing more than the car's worth for most of the loan. Underwater months matter because life happens mid-loan: totaled cars are paid at market value, not loan balance (the gap is why gap insurance exists), and trading in an underwater car rolls the hole into the next loan — the debt treadmill visible in the trade-in field above.
Both — competitively: arrive with a credit-union pre-approval, then let the dealer's finance office beat it (they sometimes can, via captive-lender promos; they also mark up rates 1-2% when you arrive without one). The pre-approval is leverage even if unused.
It pays the difference between insurance's market-value payout and your loan balance when totaled — worthwhile exactly when the term table shows long underwater months (low down payment, 72+ terms). Buy it from your insurer (~$5/mo) not the dealer (~$800 financed).
Compute both: the rebate reduces the financed amount (take it with your pre-approved loan); 0% saves the interest column. On short terms and big rebates, cash-plus-credit-union often wins; on long terms, 0% usually does. Two runs of this calculator settles it.
Work backward from 10% of gross monthly income minus insurance (~$150) and fuel: at $6,000/mo gross, that's ~$300-350 of payment → roughly a $18-22k car at 20% down/48mo. The uncomfortable output is the point.
Used APRs run ~2 points higher but the depreciation you skip dwarfs the rate difference: a 3-year-old car has already lost 30-40%. Best total-cost play remains the 2-4 year-old vehicle financed short — see the Depreciation tool.
Doc fees are capped/negotiable by state; VIN etching, nitrogen tires, paint protection and dealer-added accessories are profit padding — decline or negotiate to zero. The finance office IS a second negotiation; treat it like one.
Yes — every figure computes locally in your browser.
Negotiate the price, bring your own financing, keep the term at four years, and the payment takes care of itself. The car you can afford is the one that passes 20/4/10 — everything else is the dealership's math, not yours.