Get access to the same vehicle valuation tool that dealers rely on. With Black Book, you’ll have insider data to accurately assess trade-in and purchase values—empowering you to negotiate the best possible deal.
Purchasing a vehicle is a significant investment, and understanding your potential monthly car payments is crucial to ensure it fits within your budget. One of the best ways to estimate your payments is by using a car payment calculator. With a plethora of options available, CarEdge’s tool stands out as an ultimate car payment calculator that is both user-friendly and reliable, and never sells your data to third parties. This article will guide you on using this top-ranking calculator, discuss the importance of understanding your monthly payments, and explain the factors that influence your car loan payments.
The Importance of a Reliable Car Payment Calculator
The CarEdge Car Payment Calculator includes resale value projects.
A reliable car payment calculator is an indispensable tool for potential car buyers. It helps you gauge whether a specific vehicle is affordable and prevents you from overextending your finances. While dealer salespeople may encourage you to focus solely on monthly payments, it’s essential to consider the overall price of the vehicle, interest rate, and loan term as well. This comprehensive approach ensures you make well-rounded decisions and avoid deceptive sales tactics that could cost you more in the long run.
Key Factors Determining Monthly Car Payments
Your monthly car loan payments depend on three primary factors:
loan amount
interest rate
loan term
The loan amount is the cost of the vehicle minus any down payment or trade-in value. The interest rate, determined by your credit score and market rates, represents the percentage charged by the lender for borrowing money. Lastly, the loan term refers to the duration of the loan, typically expressed in months or years. Balancing these factors helps you find the right car loan for your financial situation.
Understanding Car Loan Amortization: Principal and Interest Breakdown
Auto loan amortization example from the CarEdge car payment calculator
Car loan amortization is the process of breaking down the loan repayment into equal monthly installments over the loan term. It allows borrowers to understand how each payment contributes to the principal and interest components of the loan. In the initial phase of the loan term, a larger portion of the monthly payment goes towards interest, while a smaller portion is allocated to the principal. As the loan progresses, the interest component decreases, and the principal component increases, eventually leading to the loan’s full repayment. The CarEdge Car Payment Calculator shows your full amortization schedule, so you know exactly where your money is going.
Estimating Monthly Payments with CarEdge Car Payment Calculator
Simplify your financing with one calculator that takes into account the loan amount, interest rate, and loan term to provide you with an accurate estimate. Plus, see resale value projections too!
Input your down payment amount, and if you have a trade-in, include that value as well
Use the drop-down menu to select your credit score to estimate the interest rate (APR)
Choose the loan term by selecting the number of months or years from the drop-down menu
Review the calculated monthly payment displayed
By following these simple steps, you can quickly and accurately estimate your monthly car payments and make informed decisions when purchasing a vehicle.
Keep in mind that while monthly payments are an essential factor, they should not be the sole consideration when purchasing a vehicle. It’s crucial to account for the overall price, interest rate, and loan term to make the best decision possible.
CarEdge’s top-ranking car payment calculator simplifies the process of estimating your monthly payments, providing an accurate and user-friendly interface. By using this powerful tool, you can confidently navigate the car-buying process and find a vehicle that meets both your needs and financial requirements.
When you’re buying a car, one of the biggest decisions you need to make is how much money to put down. The down payment you make can have a significant impact on your monthly car payment, interest rate, and the overall cost of your loan. In this article, we’ll provide expert advice from CarEdge’s Ray Shefska and break down everything you need to know about choosing the right down payment for your budget.
How Much Should You Put Down on a Car?
The down payment is the initial payment you make on a car, and it has a significant impact on the overall cost of your car. In this section, we’ll discuss the reasons why the down payment matters, including how it affects your monthly payments, interest rates, and loan terms.
CarEdge’s Ray Shefska shared this wisdom and advice: “I think that in today’s market the minimum down payment should be 20% of the total out-the-door price and if possible, upwards of 30%. That way, you have at least covered your taxes, tags, and doc fees, with some applied to the principal. Even with 20% down, I think that it still makes sense to look at GAP insurance, especially on a used car or a new car with a market adjustment.”
What does that look like in a real world example? It depends on the price of the car you’re thinking about buying. A 20% down payment for a $20,000 car is $4,000, but a 20% payment for a $60,000 car is $12,000. The monthly payments for each of these scenarios would be vastly different, despite having the same down payment percentage. More on that later.
The Average Down Payment on Cars
Average new car prices over time. Source: Cox Automotive
The average down payment on a car varies depending on whether it’s a new or used car. We’ll look at the latest data to see what the average down payment is today. We’ll also discuss why putting down a larger down payment can help protect you from depreciation.
In 2022, the average down payment on a new vehicle was just over $6,000, according to Edmunds. This is an increase of 27 percent from 2021, and is the highest it has ever been. The average down payment on used vehicles was $3,574 in 2022. For both new and used cars, the average down payment in 2022 was far below the recommended 20%. This partly explains why the average monthly payment for a new car is above $700/month in 2023. Over 15% of new car buyers pay over $1,000 a month, not including insurance or fuel.
Financing: Loan Rates and Down Payments
The down payment amount can have a significant impact on financing. A larger down payment lowers the amount financed, which means a lower monthly payment and less interest paid over the life of the loan. It can also reduce the risk of being upside down on the loan. You don’t want to be end up owing more than the car is worth. On the other hand, a smaller down payment may lead to higher monthly payments and more interest paid over the life of the loan. It’s important to find the right balance between a down payment that fits your budget and financing that makes sense for you.
Auto loan rates are at a 14-year high. When your loan has a higher interest rate, you will avoid hundreds or even thousands of dollars in interest payments by making a larger down payment. Another option is to refinance to a lower rate as soon as possible. In many cases, by putting a few hundred more dollars down today, you’re saving much more in interest over the loan term.
According to the latest data from NerdWallet, the average auto loan rate in March 2023 is 6.07% for new cars and 10.26% for used cars. Borrowers with low credit scores qualify for even higher auto loan rates.
Down Payment Example: Monthly Car Payments Based on Down Payment for a $35,000 Car
To better understand how your down payment affects your monthly car payments, we’ve created a table based on a used SUV priced at $35,000. Use this table as a guide to help you make an informed decision when buying a car and choosing a down payment amount.
You can see that with a higher down payment, your loan amount decreases, and your monthly payment drops substantially.
What about interest? If you finance the FULL $35,000 in this example, you’d pay $6,088 in total interest over 60 months. However, if you put $10,000 down, you’re paying $4,300 in interest. The numbers don’t lie: a higher down payment will save you in the long run.
Financing with a Credit Union
Why should you finance with a credit union? Credit unions offer the best rates, helping you save money for years to come. They offer lower rates than banks, have no hidden fees, and are known for their personal approach to customer service. Work with a CarEdge-approved credit union for the best rates. Drive your dream car at a rate you can afford.
We’re Here to Help
We’ve got tools that empower you to make smarter car buying decisions. From the industry’s best car buying data package to CarEdge Concierge, we’ve got options to suit every driver and budget. CarEdge Coaches are here to help guide you through the car buying process. Our team of expert coaches is dedicated to providing personalized advice and support to help you save money and avoid costly mistakes. With CarEdge Coach, you’ll have access to one-on-one guidance from experienced professionals who understand the car buying process inside and out. Prefer a DIY experience? CarEdge Data is the perfect toolkit for you. Whether you have questions about financing options, down payment amounts, or negotiating with a dealership, we’re here to help you make informed decisions and achieve your car buying goals.
The latest iSeeCars.com analysis has revealed a significant shift in used car prices in 2023, with prices dropping by 4.7 percent since September and 8.7 percent from a year ago. The study analyzed 1.8 million used car sales between February 2022 and February 2023 to identify used car pricing trends and which models experienced the biggest price increases and decreases. As a company that prioritizes transparency and fairness in the automotive industry, CarEdge is here to help you understand these trends so you can make smarter car buying decisions.
Fragmentation in the Used Car Market
According to iSeeCars’ executive analyst Karl Brauer, the used car market has fragmented over the past year. Although used car prices remain higher than pre-pandemic levels, they have consistently dropped over the past year, with an accelerated decline in the past six months. This fragmentation presents an opportunity for consumers to find better deals on used vehicles as the market adjusts to evolving conditions.
Biggest 6-Month and Year-Over-Year Price Drops
The cars with the biggest price drops in the past six months, Source: iSeeCars.com
In terms of used car prices, the Tesla Model 3 experienced the most significant drop in the last six months, with a decline of 21.5 percent. Other vehicles like the Nissan Leaf and several hybrid models also saw significant price drops ranging from 11 to 22 percent over the same period. Luxury models like the Jaguar E-Pace and two Land Rovers were among the vehicles with the largest year-over-year price declines.
Tesla’s used car prices plummeted after Tesla suddenly slashed new Tesla prices by up to 13% overnight. Combined with the fact that used Tesla’s don’t qualify for the used EV tax credit (unless you’re lucky enough to find one under $25,000…), Tesla prices are likely to remain suppressed for now.
Take a look at the steady and steep price drops for this 2019 Tesla Model 3. These are the kinds of changes we’re seeing with used Teslas nationwide.
Interest rates have climbed tremendously year-over-year, and that’s certainly a leading factor in the decline of luxury car prices. The more buyers borrow, the more they owe in interest. But that’s not always the case, as we’re about to see.
Models with the Biggest Price Hikes
The cars with the biggest price increases in the last six months. Source: iSeeCars.com
Despite the overall downward trend in used car prices in 2023, some models have experienced price increases over the past six and 12 months. Luxury vehicles, in particular, have seen price hikes, indicating that wealthier consumers are still willing to spend over the manufacturer’s suggested retail price (MSRP) to get the vehicle they desire. Fuel-efficient vehicles like electric cars, hybrids, and hatchbacks have also seen price hikes in response to the increase in fuel prices over the past year.
Hybrid Models Holding Up, Electric Vehicles Dropping Fast
Price change by fuel type, 2022-2023. Source: iSeeCars.com
Used hybrid vehicles have fared relatively well in the market, with prices dropping only about 2.1 percent in the past 12 months. The increase in fuel prices between February 2022 and February 2023 has heightened demand for fuel-efficient hybrids. On the other hand, used electric vehicles have seen a 13.9 percent price drop in the past year, which may be attributed to consumer reluctance to pay higher prices for used EVs amidst inflation and rising interest rates.
Vehicle Type Trends: Coupes, Hatchbacks, SUVs, and Minivans
Price change by vehicle segment. Source: iSeeCars.com
When examining used car prices by vehicle type, coupes have actually increased in value compared to a year ago, possibly reflecting the strength in the luxury market. Hatchbacks and pickup trucks have seen the smallest price drops, while minivans and SUVs have experienced value losses of around 10 percent over the past year.
As the pandemic subsides and the supply chain improves, new car prices are beginning to fall, albeit still priced above the MSRP. However, the gap between list prices and MSRP is shrinking, and it is expected to continue contracting throughout the year. Dealers may be paying more for used cars at the wholesale level, but retail pricing does not reflect this, suggesting a compression in profit margins on used cars.
Black Book: Unexpected Growth in Wholesale Used Car Market Surpassing Seasonal Trends
The latest wholesale used car price trends as of 3/21/2023. Source: Black Book
According to recent data from Black Book, the wholesale used car market has been experiencing remarkable growth, with gains far surpassing the typical trends for this time of year. Pre-COVID, some segments would begin to see positive movement, but this year has already witnessed six weeks of consistent increases across most segments.
The overall Car segment grew by 0.63% last week, compared to a 0.46% increase the week prior. Out of the nine Car segments, seven saw growth last week. Sporty Cars, for example, picked up momentum with a 1.17% increase, marking nine consecutive weeks of growth. While the Prestige Luxury Car segment continued to decline, it experienced the lowest single week drop since July 2022.
The volume-weighted, overall Truck segment also increased by 0.43%, mirroring the increase from the previous week. Among the thirteen Truck segments, eleven reported growth last week. The Compact Crossover segment led the way with a 0.92% gain, marking the third consecutive week it held the top spot among Truck segments. Despite these increases, Compact and Full-Size Vans continued to experience a decline.
Navigate Today’s Changing Market With Expert Help
CarEdge is committed to helping you navigate today’s changing auto market. By understanding the shifts in used car prices in 2023, we hope to empower you to make the best possible car buying decision for your needs and budget. For more information on how we can help you save more today, check out our car buying help options below.
What do you think? Will car prices continue on this trajectory, or is another sudden shift around the corner?
The best new car deals are changing in 2023. Our team of CarEdge Coaches combines decades of experience in the automotive industry to help you, the consumer, buy a car without the hassle. That’s why we create must-have resources that demystify car buying, and save you money. We surveyed our auto experts to find out which new cars have negotiable prices in 2023. The result is an up-to-date resource that will guide you through how to negotiate car prices in today’s changing market.
You Have More Negotiating Power With These New Cars Today
Full-Size Trucks
The 2023 Ford F-150 is negotiable, and can be purchased for under MSRP with some effort.
CarEdge Coaches Justise, Mario and Phil all highlighted full-sized trucks as particularly negotiable in 2023. It’s now common to see advertised discounts below MSRP for these models:
Ram 1500: negotiate up for 7% off MSRP
Ford F-150: negotiate up to 7% off MSRP
Chevrolet Silverado 1500: negotiate up to 5% off MSRP
Honda Ridgeline: negotiate up to 8% off MSRP
Mario noted that his data even shows the Toyota Tacoma TRD becoming negotiable in recent months, with some buyers he’s helped driving one home for between $1,500 and $2,000 below MSRP.
Subaru
Negotiate Subaru prices in 2023 as lot inventory returns to normal.
A year ago, could you imagine buying a brand-new Subaru WRX for $3,500 off of MSRP? In 2023, that’s exactly what CarEdge Coach Mario has been able to help at least one Subaru lover achieve. Subaru suffered the worst of the inventory woes in late 2021 and the first half of 2022, but things are looking up. As Subaru dealer lots fill back up, it’s becoming a buyer’s market again.
CarEdge Coach Justise says that new Subarus can be negotiated to the invoice price at the very least, with many deals closing for under MSRP.
Mazda prices are negotiable in 2023, especially for the CX-9, CX-5 and CX-30.
Mazda inventory is finally recovering, and that’s great news for car buyers. “Now we are refilling inventory and performance is up,” a Mazda executive told Automotive News recently. After treating its first EV like a joke with about 100 miles of range and slow charging, Mazda will “beef up” its EV goals slightly with a new plan. A dedicated battery-electric platform is now due to arrive in 2025.
In the meantime, you can score great deals on many Mazda models, depending on your local inventory.
CarEdge Coach Mario shared specific recommendations on how negotiable the most popular Mazda models are heading into spring:
If you’re determined to get a good deal on any of these new cars, we HIGHLY recommend working with a professional, experienced car buying coach. These are the toughest vehicles to negotiate, and why.w
Hybrids
The 2023 Toyota RAV4 Hybrid is far from negotiable as demand remains through the roof. Looking for a RAV4 Prime? Good luck.
Gas prices have fallen, but we all know the drill. Eventually, gas prices will rise again. Besides, it’s not like the national average is cheap by any means, so higher MPG means more money staying in your bank account. Hybrid vehicles remain in high demand, and that’s being reflected in notoriously non-negotiable prices in 2023.
If you’ve tried to get a deal on a Toyota RAV4 prime or Honda CR-V Hybrid, you’re familiar with the challenge.
Large SUVs
If you’re in the market for a new full-sized SUV, don’t expect to find good deals in the first half of 2023. Justise, a beloved CarEdge Coach who has saved hundreds of car buyers tens of thousands of dollars, says that he’s noticed that these models are particularly tough to negotiate, at least on the new car market:
Cadillac Escalade
Jeep Grand Wagoneer
Chevrolet Suburban
Land Rover
Toyota Sienna
Oddly enough, large SUVs have been among the vehicle classes that have declined significantly in the USED car market. If you’re in need of a larger SUV or van, we recommend at least taking a look at the pre-owned lots. Of course, never buy used without a pre-purchase inspection.
Don’t Overlook the Cost of Ownership
When you’re budgeting for a new car purchase, don’t forget the other significant costs that accompany vehicle ownership. Here are some helpful resources to shed light on the total cost of ownership:
Don’t Go In Blind: Negotiate Car Prices With Confidence
Whether you’re thinking of buying new or used, always know the right price to pay. This is more important than ever as the market continues to change at a quicker pace. At CarEdge, we know that the best deal is the one you completely understand. Research is key to learning how to negotiate car prices effectively, and ultimately buying your car for the price you want.
The CarEdge Community is your one-stop shop for car buying advice and consumer empowerment. Join CarEdge for free to see what the hype is all about. Looking for more help with your deal? With the CarEdge Coach plan, you get 1:1 help from CarEdge Coaches, access to Premium Resources (like car dealer tools typically hidden from public view), Deal School, and CarEdge Reports featuring suggested offer, negotiation score, and recommendations for EVERY vehicle listing.
We’re real people helping drivers save real money every day. We hope to see you there.
What goes up, must come down, and someone’s going to lose money. In this case, it’s most likely going to be car dealers on the losing end of the market.
Used car prices climbed 52 percent in 2021 and 2022, an unprecedented and historic price bubble that is slowly but surely bursting. The average price paid for a used car peaked at $33,000, an all-time record. But times are changing! Higher interest rates, rising new car inventory and fears of recession put an end to the madness as 2022 came to a close. In 2023, used car prices have much further to fall. The latest data from Black Book paints a picture of falling prices, and ultimately, perhaps a sense of normalcy.
Let’s take a look at what the latest used car price data reveals, and what our team of auto experts and consumer advocates expect for used car prices in 2023.
The Latest Used Car Price Update
Used car prices, 2019-2023. Source: Black Book
Used car prices are falling, but let’s not forget where we’re at, and where we’ve been. Black Books’ 2022 Year in Review puts used car prices into perspective remarkably.
“The average wholesale price of a 4-year-old vehicle at the beginning of the pandemic in January of 2020 was about $13.5k. At the end of December 2022, the average wholesale price of a 4-year-old vehicle was about $21.9k – almost a 60% increase above the pre-pandemic norm (so, a $10k car from early 2020 would cost about $16k right now).”
Used retail prices have fallen, but are STILL about 35% above pre-pandemic levels.
After six months of wholesale price declines, there’s still a long way to go before reaching some semblance of normalcy and price stabilization.
Data from Edmunds shows where the retail used car market stands heading into 2023. The average price of a used car in December was $29,533, down nearly $1,600 (-5%) from the record high of $31,095 reached in April 2022.
Today’s average used car price is about the same as the average NEW car price in 2010.
This week, used car prices continue to fall. Data from wholesale auctions is what you could call the pulse of the used car market. Typically, trends in wholesale prices are reflected in retail pricing three to six weeks after auction.
2023 has kicked off with wholesale used car prices continuing to fall. Last week, the overall market fell -0.79%. In recent weeks, luxury and near-luxury cars and crossovers have been falling the quickest, by nearly 2% week-over-week in some luxury segments.
Used car prices, January 2023. Source: Black Book
All nine car segments decreased last week, with three reporting declines greater than 1% (Prestige Luxury, -1.76%; Near Luxury, -1.28%; Compact, -1.18%). Compact Cars reported the largest decline for the segment since early November.
Used SUV and truck prices, January 2023. Source: Black Book
All thirteen truck segments reported declines last week, with three of those reporting a decline of over 1%. However, prices for used full-size trucks have been slowly falling after steeper drops in 2022. The average price paid for a used truck is $37,000, compared with $60,000 for a new full-size truck.
The average down payment for new and used cars hit record highs in 2022, climbing to $6,780 and $3,921, respectively. Car buyers are putting more money down to do what they can to offset the higher cost of borrowing money.
About 40% of used car purchases are financed, compared to nearly 84% for new cars. Unsurprisingly, these figures are in a steady decline as car prices have raced beyond most buyer’s budgets.
Paying cash for cars is not a bad idea, but you may be missing out on the best deal if you do. This sounds odd, and it’s definitely worth exploring further if you’re in a position to pay cash. Be sure to check out this guide to paying cash for cars!
Predictions For Car Prices in 2023
Our own Ray Shefska recently shared his biggest predictions for 2023. With over 40 years in the business, Ray’s insights touch on both the usual suspects and some surprisingly unsung themes of today’s auto market.
These are Ray’s big predictions for 2023:
1. New car inventory will continue to grow
2. Used car affordability will continue to keep sales volume down
3. Rising interest rates will lower demand and worsen affordability
Before you head to the dealership to negotiate a deal, check your loan balance for your trade-in. According to Edmunds’ analysis, 17.4% of new vehicle sales with a trade-in had negative equity in Q4 2022, up from 14.9% in Q4 2021. Negative equity is when you still owe more than the car is worth at the time of trade-in. Having negative equity will add to the amount of your next auto loan, making payments higher, and resulting in even more interest paid over the life of the loan.
How can you avoid ending up ‘underwater’ with negative equity? The easiest way is to have a larger down payment, typically at least 20%. Factors such as depreciation and interest rates weigh heavily on how long it takes to pay down an auto loan.
Use this car depreciation calculator to see how quickly particular models are likely to lose value over time. It’s better to be informed than to be in over your head with auto loan debt.