With 10% down, 6.5% sales tax and a 7.5% APR, a $32,000 car costs $618.77 a month over 60 months and $6,246 in interest. Stretching to 84 months lowers the payment to $473.65 but raises interest to $8,906.
Monthly payment by APR and term
| Term | 5.5% APR | 7.5% APR | 9.5% APR |
|---|---|---|---|
| 36 months | $932.45 | $960.56 | $989.18 |
| 48 months | $718.16 | $746.64 | $775.80 |
| 60 months | $589.84 | $618.77 | $648.54 |
| 72 months | $504.51 | $533.92 | $564.32 |
| 84 months | $443.75 | $473.65 | $504.70 |
Total cost at 7.5% APR
| Term | Payment | Total interest | All-in (down + payments) |
|---|---|---|---|
| 36 months | $960.56 | $3,700 | $37,780 |
| 48 months | $746.64 | $4,959 | $39,039 |
| 60 months | $618.77 | $6,246 | $40,326 |
| 72 months | $533.92 | $7,562 | $41,642 |
| 84 months | $473.65 | $8,906 | $42,986 |
Amount financed in this example is $30,880: the $32,000 price plus $2,080 sales tax, minus a $3,200 down payment.
Income rule of thumb
A common guideline is to keep the car payment near 10% of gross income. On that basis, the 60-month payment above fits an income of about $74,253 a year. Treat it as a starting point, not a lending rule.
What we assumed
- Sales tax of 6.5% on the full price, no fees, unless a table says otherwise.
- Fixed APR, equal monthly payments, no prepayment penalty.
- Insurance, fuel and maintenance are not included.
- 10% down payment, no trade-in.
Related calculators: Auto Loan Calculator, Personal Loan Calculator.
Questions people ask
Which APR should I use?
Use the rate from your pre-approval or the dealer quote. Rates differ by credit score, loan age and term; used-car loans often cost more than new-car loans.
Does a longer loan make sense?
It lowers the payment but increases total interest and keeps you owing longer. The table above shows the exact tradeoff.
Estimates for general education, not financial, tax or legal advice. Real results depend on your lender, employer, tax situation and location. See the disclaimer.