Cash or finance?
Paying cash means no interest and no monthly payment, but it takes patience. Financing gets you the car now, at the cost of interest that adds up quickly at today's auto loan rates. The calculator shows both side by side: how many months of saving it would take to pay in full, and how much interest a five-year loan on the same car would cost.
A middle path is to save a solid down payment, often 10% to 20%, and finance a smaller amount over a shorter term. Less borrowed and fewer months means far less interest, and it lowers the risk of owing more than the car is worth as it loses value.
Budget for the full price
Sticker price is only part of the cost. Sales tax, registration and dealer fees can add several percent, which is why the calculator includes a tax and fees line. After you buy, insurance, fuel, maintenance and depreciation make up the real cost of ownership, which our true cost of a car calculator adds up.
Common questions
How much should I save for a car?
If you are financing, 10% to 20% of the price as a down payment is a common target. If you are paying cash, the full price plus tax and fees.
Is it better to pay cash for a car?
It avoids interest and keeps your monthly budget free. If a lender offers a promotional rate below what your savings earn, financing can make sense instead.
How long should a car loan be?
Shorter is cheaper. Many planners suggest no more than 48 to 60 months.
This calculator gives estimates for planning. Real returns, rates and prices change, so treat the result as a guide rather than a promise. Read how we build and check our calculators.