Auto Loan Interest Comparison Calculator
Compare total interest paid, monthly payments, and overall costs across different loan terms and interest rates to find the best car finance deal.
Compare Your Loan Offers
Enter the details of two different auto loan offers. The calculator instantly reveals the true cost of each, helping you avoid expensive long-term traps and choose the most economical option.
Loan Offer Comparator
See exactly how interest rates and terms affect your wallet.
Understanding Auto Loans
Key factors that influence your car finance costs
The Term Length Trap
Extending a loan from 48 to 72 months lowers your monthly payment, but drastically increases the total interest you pay over the life of the loan.
APR vs. Monthly Payment
Focus on the Annual Percentage Rate (APR) and total cost, not just the monthly payment. A lower APR saves you significantly more money over time.
Negative Equity Risk
Long-term loans increase the risk of being “upside-down” (owing more than the car’s depreciated value), which is dangerous if you need to sell or if the car is written off.
Early Repayment
Most regulated auto loans allow early repayment. In the UK, lenders can charge a maximum of 1% of the early repayment amount, which is often far less than the interest you will save.
Loan Term Impact Analysis
Example based on a £20,000 loan at 6% APR to illustrate how term length affects total cost.
| Loan Term | Monthly Payment | Total Interest Paid | Total Cost of Loan | Risk Level |
|---|---|---|---|---|
| 36 Months | £608.04 | £1,889.52 | £21,889.52 | Lowest |
| 48 Months | £469.70 | £2,545.60 | £22,545.60 | Low |
| 60 Months | £386.66 | £3,199.40 | £23,199.40 | Moderate |
| 72 Months | £331.40 | £3,860.80 | £23,860.80 | High |
| 84 Months | £292.24 | £4,548.16 | £24,548.16 | Very High |
Auto Loan FAQ
Answers to the most frequently asked questions about comparing and choosing car finance options.
The calculator uses the standard amortisation formula to compute the monthly payment, total interest paid, and overall cost for two different loan offers. It then highlights the differences to show you exactly how much you can save by choosing the more favourable terms.
No. While a longer term (e.g., 72 or 84 months) reduces your monthly payment, it significantly increases the total amount of interest you pay over the life of the loan. It can also lead to being ‘upside-down’ on the loan, where you owe more than the car is worth.
A good auto loan rate in the UK typically ranges from 4% to 7% APR for borrowers with excellent credit. Rates can be higher for used cars, longer terms, or borrowers with lower credit scores. Always compare the representative APR, not just the monthly payment.
Yes, most auto loans allow early repayment. In the UK, lenders are regulated and may charge a maximum of 1% of the early repayment amount (or 0.5% if less than a year remains on the loan). Paying early can save you a substantial amount in interest.
It depends. Dealer finance (like PCP or HP) sometimes offers promotional 0% or low-rate deals, but you don’t own the car until the end (in PCP). A personal loan gives you immediate ownership and flexibility to sell the car at any time, but rates depend entirely on your credit score. Always compare the total cost of both options.