Car Loan Calculator

How this calculator works

Frequently asked questions

What is a balloon or maxirata payment, and what happens at the end?

A balloon (called maxirata in Italy, or the residual in PCP-style contracts) is a large final payment that the loan defers to the last month. The monthly installments only amortize the difference between the financed amount and the balloon, which is why they are much lower than on a fully amortizing loan, while the balloon itself keeps accruing interest for the whole term. At the end you face a decision: pay the balloon and keep the car, refinance the balloon into a new loan at whatever rates then apply, or, in contracts that allow it, return the car in lieu of the balloon. Balloon deals cost more in total interest than a plain loan of the same rate and term, so treat the lower monthly payment as deferral, not savings.

Is 0% dealer financing better than a cash discount?

Not automatically: forgoing a cash discount is a real cost of the 0% deal. You can settle it with this calculator. Run the financed offer with the full price at 0%, then compare its total paid against the discounted price you would pay in cash. Equivalently, treat the discount you give up as a fee on the 0% loan and look at the effective APR: a 0% loan on 20,000 with a forgone 1,500 discount is not free money, it is a loan at a very real annual rate. Whichever framing you use, the cheaper offer is the one with the lower total cost for the same car.

What does the effective APR figure mean?

It is the true annual cost of the loan including fees, computed the way the EU Consumer Credit Directive defines the APR (TAEG): the internal rate of return that equates the money you actually receive at signing with every payment you make, including the balloon, annualized as (1 + monthly rate)^12 - 1. Without fees it simply restates the effective annual equivalent of the nominal rate, so the calculator shows it only when fees are present. Because it is a single number that absorbs fees, term, and balloon structure, it is the right way to compare offers whose quoted rates are not comparable.

Should I pay the fees upfront or finance them into the loan?

Paying upfront costs less money in total: financed fees are borrowed, so you repay them with interest over the whole term. Counterintuitively, the financed option can show a slightly lower effective APR, because the same fee is spread over a larger financed amount, and yet still cost more in absolute terms. That is a good reason not to compare a single offer's two variants by APR alone: look at the total paid figure. Between two different offers, though, the APR remains the right comparison, computed the same way for each.

Can I roll the debt from my old car into the new loan?

Yes, and the calculator models it explicitly. If you still owe more on your old car loan than the car is worth as a trade-in, the difference is negative equity, and dealers commonly roll it into the new loan. Enter the net effect as a negative trade-in value: the financed amount then rises above the new car's price, the payment and total interest rise with it, and the mathematics is otherwise unchanged. It is a legitimate but expensive habit, because you keep paying interest on a car you no longer own, so the calculator makes the extra cost visible rather than hiding it.

What does this calculator not include?

It models the loan only. Insurance, registration taxes, depreciation, fuel, maintenance, and every other running cost of ownership are excluded, and they usually add up to more than the interest. It also assumes a fixed rate for the whole term and that you make every payment as scheduled, with no early repayment or missed installments. Fee levels, disclosure rules, and product names differ by country, so verify the numbers of your specific offer, and remember that the cheapest loan is not the same thing as the cheapest car.