Auto loan payment.
Monthly payment
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Total interest
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Total paid
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Your breakdown
Updates live as you type| Item | Amount (CAD) |
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Worked example
Take the default $40,000 vehicle, tax included, with a $5,000 down payment, financed at 6 percent APR over 6 years. The amount actually borrowed is the price minus the down payment, so $35,000. Spread over 72 monthly payments at a monthly rate of 0.5 percent, the standard amortisation formula gives a payment of about $580. Over the full 72 months you hand over about $41,764 in total, which means roughly $6,764 of that is interest and the rest repays the $35,000 principal. The longer the term, the lower each payment but the more interest you pay overall, which is the trade buyers make when they stretch financing to 7 or 8 years. The footnote about zero percent financing is the real-world catch: a manufacturer rate of zero often comes instead of a cash rebate, so it is worth comparing the rebate plus a cheaper loan against the headline zero.
How it is calculated
An auto loan is a fully amortising loan, meaning each equal monthly payment covers that month’s interest first and applies the rest to principal until the balance reaches zero. The tool takes the vehicle price (with sales tax already included, since you finance the taxed amount), subtracts the down payment to get the principal, then applies the standard payment formula using the monthly rate, which is the APR divided by twelve, and the number of months, which is the term in years times twelve. Total paid is simply the monthly payment times the number of months, and total interest is that total minus the principal. The model assumes a fixed rate and no trade-in, fees, or extra payments. Stretching the term lowers the monthly figure but raises lifetime interest, and a larger down payment cuts both, which is the main lever a buyer controls.