Car Loan Calculator

Total cost, not monthly payment

Judging a car purchase on the monthly figure is how people end up overpaying. The same payment can represent very different deals depending on term, rate and price.

Compare three things: the purchase price, the APR, and the total you will have paid by the end.

How a down payment changes things

A larger down payment reduces the amount borrowed, which lowers both the payment and the total interest. It also protects against negative equity, where the balance exceeds the car's value.

A commonly cited guideline is around 20% down on a new car and 10% on used — enough to stay roughly level with depreciation in the early period.

Trade-ins and rolled-over debt

If you still owe money on your current car and its value is less than the balance, that shortfall is usually added to the new loan. You then borrow more than the new car is worth from day one.

This is how people end up several cars deep in accumulated negative equity. If you are in this position, the cheaper option is usually to keep the current car until the balance clears.

The costs beyond the loan

• Insurance — varies enormously by model and can exceed the payment difference between two cars
• Fuel — see the Mileage Calculator for cost per mile
• Maintenance and tyres — higher on performance and premium models
• Registration and taxes — often tied to vehicle value
• Depreciation — usually the largest cost of all, and invisible until you sell

A cheaper car with expensive insurance and poor economy can cost more to run than a dearer one. Compare the full picture.