How much should my car payment be?

Financial experts recommend keeping your total car costs (payment, insurance, gas, maintenance) below 15-20% of your take-home pay. For a $5,000/month take-home, that's a maximum car payment of about $400-$500/month.

What is the average auto loan rate?

Average auto loan rates in 2026 are 6.8% for new cars and 10.2% for used cars for borrowers with good credit. Excellent credit (780+) can get rates as low as 4.8% for new and 5.9% for used.

How long should an auto loan be?

A 48-60 month loan is ideal. Loans longer than 60 months often lead to being underwater (owing more than the car is worth) and cost thousands more in interest. Avoid 72-84 month loans if possible.

Auto Loan Calculator: Estimate Your Monthly Car Payment (2026)

Your monthly car payment depends on the loan amount, interest rate, and loan term. Here’s how to estimate what you’ll pay and how to get the best deal.

Auto Loan Payment Quick Reference

New Car ($35,000 Loan)

Term	5% APR	7% APR	10% APR	15% APR
36 months	$1,049	$1,081	$1,129	$1,213
48 months	$805	$838	$887	$974
60 months	$660	$693	$743	$832
72 months	$564	$598	$650	$743
84 months	$496	$530	$583	$680

Used Car ($20,000 Loan)

Term	7% APR	10% APR	13% APR	18% APR
36 months	$617	$645	$674	$723
48 months	$479	$507	$537	$587
60 months	$396	$425	$456	$508
72 months	$341	$371	$405	$460

Current Auto Loan Rates by Credit Score (2026)

Credit Score	New Car APR	Used Car APR
780+ (Excellent)	4.8%	5.9%
740-779 (Very Good)	5.5%	7.0%
670-739 (Good)	6.8%	9.0%
580-669 (Fair)	10.5%	14.5%
300-579 (Poor)	15.0%	20.0%+

How Much Car Can You Afford?

The 20/4/10 Rule

Rule	What It Means
20% down payment	Reduces loan amount and risk of being underwater
4-year (48-month) loan max	Limits interest costs
10% of gross income for payment	Total car costs stay manageable

Affordability by Income

Gross Annual Income	Monthly Income	Max Car Payment (10%)	Affordable Car Price*
$40,000	$3,333	$333	$15,000-$18,000
$60,000	$5,000	$500	$23,000-$27,000
$80,000	$6,667	$667	$31,000-$36,000
$100,000	$8,333	$833	$39,000-$45,000
$125,000	$10,417	$1,042	$49,000-$56,000

*Assumes 20% down, 48-month term, 7% APR

Impact of Down Payment on Monthly Costs

$35,000 Car, 7% APR, 60-Month Loan

Down Payment	Loan Amount	Monthly Payment	Total Interest	Total Cost
$0 (0%)	$35,000	$693	$6,580	$41,580
$3,500 (10%)	$31,500	$624	$5,922	$40,922
$7,000 (20%)	$28,000	$554	$5,264	$40,264
$10,500 (30%)	$24,500	$485	$4,606	$39,606

A 20% down payment saves $1,316 in interest and reduces the monthly payment by $139 compared to zero down.

True Cost of a Longer Loan Term

$30,000 Loan at 7% APR

Loan Term	Monthly Payment	Total Interest	Total Cost	Savings vs. 84-month
36 months	$926	$3,350	$33,350	$5,160
48 months	$719	$4,491	$34,491	$4,019
60 months	$594	$5,657	$35,657	$2,853
72 months	$511	$6,909	$36,909	$1,601
84 months	$454	$8,510	$38,510	$0

Choosing 48 months over 84 months costs $265 more per month but saves $4,019 in interest.

Tips for Getting the Best Auto Loan

Get preapproved before visiting the dealer—gives you negotiating leverage
Check credit unions—rates are often 1-2% lower than banks or dealers
Negotiate the total price, not the monthly payment—dealers stretch terms to hit any monthly number
Avoid dealer add-ons—extended warranties, paint protection, and gap insurance are usually overpriced
Consider certified pre-owned—manufacturer warranty at used car prices
Make a down payment of 20%+—reduces interest and prevents being underwater

The Bottom Line

Aim for a 48-60 month loan with at least 20% down. Get preapproved from a bank or credit union before visiting a dealer, and negotiate the out-the-door price rather than a monthly payment. On a $30,000 loan, choosing a 48-month term over 84 months saves over $4,000 in interest.