Change APR and watch total interest move
These defaults use a 6.5% sales-tax assumption, $700 in fees, $186/month insurance, 1,000 miles/month, 25 MPG and a $900/year maintenance reserve.
Same $30,000 balance at different APRs
These examples isolate the loan math. Taxes, registration, dealer fees, insurance, fuel and maintenance can increase the real monthly cost.
| Scenario | Amount financed | APR | Term | Payment | Total interest |
|---|---|---|---|---|---|
| 5% APR | $30,000 | 5.0% | 60 mo | $566/mo | $3,968 |
| 7% APR | $30,000 | 7.0% | 60 mo | $594/mo | $5,642 |
| 10% APR | $30,000 | 10.0% | 60 mo | $637/mo | $8,245 |
| 14% APR | $30,000 | 14.0% | 60 mo | $698/mo | $11,883 |
APR changes every payment, not just the first one.
Interest is built into the amortized payment throughout the loan. A few percentage points can create a meaningful difference in total borrowing cost, especially on larger balances and longer terms.
Compare offers using the same amount and term.
A dealer can make a higher APR look manageable by extending the loan. Keep the financed amount and term constant when comparing rates so you can see the rate difference clearly.
FAQ
How is car-loan interest calculated?
Most standard auto loans use amortized monthly payments. Each payment covers interest on the outstanding balance plus principal, with the mix changing as the balance falls.
Does a longer term increase total interest?
With the same principal and APR, extending the term usually lowers the monthly payment but keeps the balance outstanding longer, which generally increases total interest.
Can I compare two lenders with this calculator?
Yes. Enter the same vehicle price, down payment and term, then change the APR to compare estimated payments and total interest. Confirm final lender disclosures before signing.