Every auto loan calculator gives you a payment. This one also shows the months you would owe more than the car is worth. On zero down over 84 months, that is 47 months — and if the car is written off during them, the shortfall is yours to pay on a car you no longer have.
Auto Loan Calculator
LiveWhy the term you choose decides more than the rate
| Term | Payment | Total interest | Note |
|---|---|---|---|
| 36 months | $973 | $3,515 | Never underwater with any sensible deposit |
| 48 months | $754 | $4,707 | The traditional maximum |
| 60 months | $624 | $5,924 | Now the most common term |
| 72 months | $537 | $7,167 | Underwater for 31 months with nothing down |
| 84 months | $475 | $8,435 | Underwater for 47 months. The car is often out of warranty before the loan ends |
From 36 to 84 months the payment falls 51% and the interest rises 140%. On $31,500 borrowed at 7%, that is $4,920 more for the same car — and four extra years during which a repair bill arrives on top of a payment that has not stopped.
What negative equity actually costs
| What happens | If you have equity | If you are underwater |
|---|---|---|
| Car is written off | Insurance pays the value; you keep the difference | You owe the shortfall on a car you no longer have. This is what gap insurance covers |
| You trade it in | The equity reduces the next loan | The shortfall is added to the next loan, which starts it underwater too |
| You want to sell | Sell, settle, keep the rest | You must find cash to clear the loan before the title transfers |
| You cannot pay | Sell and settle | Repossession, and the deficiency balance still stands afterwards |
How cars actually lose value
| Age | Typical value retained | Note |
|---|---|---|
| Drive-away | 88–91% | The instant loss is real: a new car becomes a used car the moment it is registered |
| 1 year | ~80% | The steepest year by a wide margin |
| 3 years | ~58% | Where most lease returns and ex-fleet cars enter the market |
| 5 years | ~40% | The conventional planning figure — roughly 60% lost |
| 8 years | ~25% | The curve flattens. Loss per year is now small in absolute terms |
This is why a two or three-year-old car is the value purchase. The first owner absorbed the steepest part of the curve; the second buys a car with most of its life left at 58% of the price. The same loan on a used car is also far less likely to go underwater, because the curve it is racing has already flattened.
Depreciation varies enormously by model — some trucks and a few sports cars hold value far better, and some luxury saloons far worse. These are general figures for planning, not a forecast for a specific vehicle.
The numbers a dealer will move around
| What they ask | What it lets them do | Better question |
|---|---|---|
| “What monthly payment are you looking for?” | Hit any payment by extending the term | What is the out-the-door price? |
| Trade-in value discussed with the new car | Move money between the two so neither is clearly good | Settle the trade-in price separately, first |
| Financing arranged in-house | Mark up the rate above what the lender offered | What rate did the lender approve? Bring your own pre-approval |
| Add-ons quoted monthly | Make $2,000 of extras sound like $28 a month | What does each item cost in total? |
Negotiate one number: the total price of the car, before any discussion of financing or trade-in. Everything else is arithmetic you can do yourself once that is fixed, and this calculator will do it in a few seconds.
Common mistakes
Frequently asked questions
What does being underwater on a car loan mean?
Owing more than the car is worth. It happens because depreciation is fastest at the start while loan repayment is slowest at the start. On zero down over 84 months it lasts 47 months. If the car is written off or you need to sell during that period, you owe the difference in cash.
How much should I put down?
Enough to stay above the depreciation curve. On a new car at 7% over 72 months, 10% down keeps you above water throughout; nothing down leaves you underwater for 31 months. On a shorter term less is needed, because the balance falls faster.
Is a 72 or 84-month car loan a bad idea?
It costs substantially more and keeps you underwater far longer. On $31,500 at 7%, 84 months costs $8,435 in interest against $3,515 over 36. If the long term is the only way to afford the car, that is information about the car rather than about the loan.
Do I need gap insurance?
If you are underwater, it is the only thing standing between a written-off car and a debt on a car you no longer have. Once the balance falls below the value it is no longer needed, and the calculator above shows when that happens. Buying it from an insurer is usually far cheaper than from the dealer.
Should I buy new or two years old?
A three-year-old car retains around 58% of its price, meaning the first owner paid for the steepest part of the curve. A used car is also much less likely to go underwater, because its depreciation has already flattened while the loan amortises at the same speed.
Does a bigger down payment lower my rate?
Sometimes, because a lower loan-to-value ratio is less risky for the lender. The larger effect is on the total interest, which falls in proportion to the amount borrowed, and on how quickly you reach positive equity.
Can I pay a car loan off early?
Usually yes, and on a simple-interest loan it saves the remaining interest. Check for a prepayment penalty and for precomputed interest, where the total was fixed at signing and an early payoff refunds far less than it should. Both are disclosed in the contract.
Should I take the rebate or the 0% financing?
Work out both. Take the rebate, borrow the smaller amount at your own rate, and compare the total against the 0% deal on the full price. The rebate usually wins on shorter terms and lower rates; the 0% wins when rates are high or the term is long.
Is anything I enter sent anywhere?
No. Everything runs in your browser with no server request, and works offline once the page has loaded. Nothing is written to disk and nothing persists after you close the tab.
Sources
- US Consumer Financial Protection Bureau, Auto Loans. Guidance on negotiating price separately from financing, dealer rate markup, and what must be disclosed before signing.
- Regulation Z, 12 CFR Part 1026. The Truth in Lending Act rule defining APR and the finance charge, and requiring disclosure before the contract is signed.
- Formula. The payment is the standard annuity equation,
P × r ÷ (1 − (1 + r)−n), where r is the monthly rate and n the number of months. The balance in any month follows from applying interest and subtracting the payment. - Depreciation model. Roughly 20% in the first year and 15% a year thereafter for a new car, with a gentler curve for used. These are conventional planning figures; actual retention varies widely by model, mileage and market.
- US National Consumer Law Center. The Cost of Credit. The standard reference on precomputed interest and where an early payoff refunds less than the remaining interest.
Payment and balance figures are computed from the equations above. The depreciation curve is a model, not a prediction — it is included because leaving it out is what makes every other auto loan calculator silent on the one risk that costs people real money.
Related calculators
See the full list of Financial calculators, or try:
- Loan Calculator — true APR and the effect of fees
- Car Lease Calculator — leasing against buying
- Lease vs Buy — the full comparison
- Sales Tax Calculator — the tax layer on the purchase
- Debt Avalanche — if the car loan is one of several
- Car Depreciation Calculator — the curve on its own