Estimate your monthly car payment, total interest, and true cost of ownership including sales tax.
Quick Answer:In 2026, the average auto loan rate is 6.5-8% for new cars and 8-12% for used cars. A $35,000 car with $5,000 down at 6.5% for 60 months costs approximately $587/month with $5,215 in total interest.
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Consider a 48- or 60-month loan to balance affordability and total cost. While 72- and 84-month loans have lower monthly payments, you could pay thousands more in interest and risk being underwater on the loan. Also, check if your state charges sales tax on the full vehicle price or just the difference after trade-in -- this can save you hundreds or even thousands of dollars.
In 2026, a good interest rate for a new car loan is between 5.5% and 7.5%, while used car loans typically range from 7% to 12%. Your credit score, loan term, and down payment all affect the rate you qualify for. Borrowers with excellent credit (750+) can often secure rates below 5%.
Financial experts recommend putting at least 20% down on a new car and 10% on a used car. A larger down payment reduces your monthly payment, total interest paid, and the risk of being upside-down on your loan (owing more than the car is worth).
Longer loan terms (72-84 months) result in lower monthly payments but significantly more total interest. You also risk negative equity since the car depreciates faster than you pay it off. A 60-month loan is generally the sweet spot balancing affordability and total cost.