Auto Loan Payment & Depreciation Calculator

Payment, depreciation, and equity on the same timeline

A $32,000 vehicle with $3,000 down, financed at 7.2% over 5 years, carries a monthly payment of $576.98. At the 3-year mark you plan to sell or trade in, straight-line depreciation of 15%/year puts the vehicle's value at $19,652.00, while the loan payoff balance sits at $12,860.74 -- leaving $6,791.26 in equity.

That equity gap only exists because the loan (5-year term) outlasts the depreciation curve's steepest years. Vehicles typically lose the most value in years one through three, exactly the window this default example holds the car for.

Extend the hold period past the loan's payoff date and equity becomes the full resale value, since the payoff balance drops to zero once the loan term ends.

Where the depreciation estimate comes from

Straight-line residual is a planning guess, not a wholesale bid. The 15% annual depreciation rate is a simplification -- real depreciation is steepest in year one (often 20%+) and slows in later years, so this model will understate first-year loss and overstate later-year loss somewhat.

Price and loan term must both be valid (greater than zero) for the payment formula to resolve.

If a lease is the alternative you're weighing instead of a purchase, run the same vehicle price through the Car Lease vs. Buy Calculator, which prices both paths against each other directly.

Before you rely on the resale number

An actual trade-in or private-party quote will beat this planning estimate for accuracy every time -- use this page to compare terms and hold periods, not to price an upcoming sale.

If the loan itself is the variable you're optimizing (a lower rate becomes available later), the Refinance Break-Even & Savings Calculator uses the same amortization math to test whether refinancing pays for itself.

Frequently Asked Questions (FAQ)