Monthly payment, total interest and resale value for a $20,000 car over 5 years
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$20,000 5-Year Car Loan Calculator: Payment, Interest and Resale
Twenty thousand dollars is the classic new-economy-car budget and also buys a well-equipped two-year-old model. Spreading it over five years at 7.5% APR keeps the payment near $360 while capturing the full depreciation story of a mid-priced vehicle. This page pre-fills a 10% down payment of $2,000, leaving an $18,000 loan across 60 instalments.
What the 60 payments add up to
With r = 0.075 ÷ 12 = 0.00625 and n = 60, the amortization payment is about $360.68 per month. Across 60 payments you hand over roughly $21,641, so interest is about $3,641 — nearly 20% of the $18,000 borrowed, a direct result of the longer term.
monthly = L × r × (1+r)^n ÷ ((1+r)^n − 1) L = 20,000 − 2,000 = 18,000 r = 0.00625 n = 60 monthly ≈ 18,000 × 0.00625 × 1.4533 ÷ 0.4533 ≈ $360.68
Depreciation over five years
At 15% annual depreciation the car is worth about $17,000 after one year, $12,283 after three years and $8,874 after five. The vehicle sheds roughly $11,126 of value, about three times the interest bill — a reminder that timing your purchase matters more than shaving the rate.
Five-year cash out: $2,000 down + $21,641 instalments = $23,641, against an $8,874 resale value.
Choosing a 4-year term instead would cut interest by roughly $700 but push the payment above $430.
At month 60 the loan balance is zero while the car is still worth nearly $9,000 — you finish with real equity, not an underwater loan.
Always compare the APR you can actually get; a two-point drop saves several hundred dollars over five years.
If the monthly payment feels tight, a larger down payment or a slightly cheaper car beats stretching the term to six years, which would add well over a thousand dollars of interest.