How to Estimate Your New Car Payment  


If you’ve been driving around your old clunker for a while, and are looking forward to finally getting some new wheels, you’ll know how nerve wracking buying a new car can be. You’ve finally saved enough for a down payment, worked hard to normalize your monthly income to look attractive to lenders and cleaned up your credit report to the best of your ability. If you don’t already have your heart set on a specific year, make and model, now is the time to figure out how much car you can afford by estimating how much your car payment would be in certain scenarios.

There are dozens of car payment calculators on the Internet on sites like All work in a very similar way. You’ll need to enter key information including car price, down payment funds you have available, how much your current vehicle is worth if you plan on trading it in, sales tax in your state and local community, interest rate you anticipate receiving from a lender and how many years you plan to finance your car typically ranging from four to six years. The car price should be easy enough to ballpark if you’ve been researching particular vehicles you might be interested in purchasing. Putting money down up front only means you’ll have smaller payments over the life of the loan which might hurt a bit on closing day, but you thank yourself each month you make your car payment. Check your car’s estimated value on with information like make and model, general condition, mileage and your location. The sales tax in your state should be easy enough to find and you can also find information on prevailing interest rates on car loans by calling your bank or checking rates on a reputable financial website.

All of this information will provide you with an estimate for how much your car payment will run each month based on these factors. Knowing this will help you gauge how easy or how difficult making that monthly payment will be in addition to your other financial obligations. No car is worth over extending yourself or your household budget. That’s why it’s important to gather as much information upfront so that you know your numbers, and limits, before any car shopping begins.