Bankrate and Cars.com provide auto loan calculator tools on their websites that use amount borrowed, interest rate and loan term to determine a borrower's monthly payment. Cars.com provides a more detailed calculator that figures in total vehicle price, trade-in value and down payment into its results. Auto dealers and banks both provide loans to car buyers, according to the Federal Trade Commission.
During the term of a car loan, the amount of each payment paid toward interest gradually decreases while the proportion of the payment reducing the principal borrowed increases, according to Bankrate's amortization schedule. The interest rate on a four-year auto loan averages 3.18 percent for a new car and 3.32 for a used car, as of September 2015, reports Cars.com.
Car loans with longer terms tend to have lower monthly payments, while loans with the same interest rates for shorter periods of time have lower overall total costs, according to the Federal Trade Commission. Car buyers who own vehicles may trade them in and use the value toward the purchase of new cars, reducing the amount the buyers pay out-of-pocket in a down payment or loan. Car dealers may offer convenient loans for buyers thatbinclude exclusive promotional programs, but traditional financial institutions offer a greater opportunity to compare loan terms in advance of purchase.