Auto Loan Calculator

A car loan spreads the amount borrowed over a fixed term. Each monthly payment covers interest and repays part of the balance. The payment depends on the loan amount, interest rate, term, deposit, and any fees included in the finance.

The calculator is most useful for comparing scenarios. A lower monthly payment can look attractive, but it may come from a longer term that increases total interest.

The true cost of car finance is more than the monthly repayment. These components should be checked before signing an agreement.

Compare total cost, not just the monthly figure. Check whether the deal includes a balloon payment, mileage limits, early settlement terms, dealer incentives, or optional extras. If the car may be sold before the end of the term, consider whether the outstanding finance could exceed the car value.

A standard car loan is not the same as hire purchase, PCP, or leasing. With a personal loan, you usually own the car and owe the lender. With hire purchase, ownership normally transfers after the final payment. With PCP, a balloon payment may be needed to own the car. With leasing, you usually return the vehicle.

Cars usually lose value over time. If the loan balance falls more slowly than the car value, you may owe more than the vehicle is worth. This can matter if you want to sell, settle early, or change cars before the finance term ends.

A car that is affordable on finance may still be expensive once insurance, servicing, MOT, tyres, repairs, fuel or charging, parking, congestion charges, and depreciation are included. Use the monthly finance payment as only one part of a transport budget.

Dealer finance can be convenient because the car and finance are arranged together. Direct lending, such as a bank loan, can give you a clearer cash budget before visiting the dealer and may improve your negotiating position. The best option depends on APR, fees, deposit, incentives, early settlement terms, and whether the agreement is secured on the car.

Some dealers focus the conversation on monthly payment. Always ask for the total amount payable, APR, term, deposit, fees, optional final payment, and what happens if you settle early.

A part exchange can reduce the cash price of the next car, but the dealer valuation may be lower than a private sale. If you still owe finance on the old car, the settlement figure must be cleared. When the old finance balance is higher than the trade-in value, the shortfall is negative equity and may be rolled into the new deal, increasing the cost.

Paying cash avoids interest and monthly finance commitments, but it uses savings that might be needed elsewhere. Financing preserves cash but adds interest and can encourage overbuying because the cost is framed as a monthly payment. Compare both the monthly affordability and the total cost before deciding.