Car Loan Calculator with Amortization Chart
Module A: Introduction & Importance of Car Loan Calculators
A car loan calculator icon represents more than just a financial tool—it’s your gateway to making informed, confident decisions when purchasing a vehicle. In today’s complex automotive financing landscape, where interest rates fluctuate and loan terms vary dramatically, having precise calculations at your fingertips can save you thousands of dollars over the life of your loan.
The icon itself serves as a visual cue for financial empowerment. When you see that calculator symbol next to car listings or dealership offers, it signals transparency and the opportunity to verify claims before committing to what is often the second-largest purchase in a person’s life (after a home). Our premium calculator goes beyond basic estimates by incorporating:
- Real-time amortization scheduling
- State-specific tax calculations
- Trade-in value adjustments
- APR vs. interest rate distinctions
- Early payoff scenarios
According to Consumer Financial Protection Bureau data, nearly 85% of new car purchases involve financing, with the average loan term now exceeding 69 months. This extended financing trend makes precise calculation tools not just helpful but essential for avoiding costly long-term debt traps.
Module B: How to Use This Car Loan Calculator (Step-by-Step)
Our interactive calculator provides bank-level precision with consumer-friendly simplicity. Follow these steps to unlock its full potential:
-
Enter Vehicle Price: Input the manufacturer’s suggested retail price (MSRP) or the negotiated purchase price. For used vehicles, use the agreed-upon sale price.
- Pro Tip: Check Kelley Blue Book for fair market values
- Include any added options or dealer-installed accessories
-
Specify Down Payment: Enter the cash amount you’ll pay upfront. Industry standard recommends 20%, but our calculator shows how different down payments affect your terms.
- Minimum down payments often start at 10% for new cars, 0% for special promotions
- Larger down payments reduce loan amounts and may secure better rates
-
Select Loan Term: Choose from 36 to 84 months. Shorter terms mean higher monthly payments but significantly less interest paid overall.
Term Comparison Example:
$30,000 loan at 5.5% APR:
– 36 months: $918/mo, $2,848 total interest
– 72 months: $488/mo, $5,936 total interest -
Input Interest Rate: Enter the annual percentage rate (APR) you’ve been quoted. Our calculator distinguishes between:
- Interest Rate: The base cost of borrowing
- APR: Includes all fees (more accurate for comparisons)
Current average rates (Q3 2023):
- New cars: 5.2% – 6.8%
- Used cars: 7.4% – 9.1%
- Excellent credit (720+): 4.5% – 5.5%
- Subprime credit (580-619): 12% – 18%
-
Add Trade-In Value: Enter your current vehicle’s estimated trade-in value. This directly reduces your loan amount.
- Get instant trade-in offers from Carvana, CarMax, or local dealers
- Consider selling privately for potentially 10-15% more value
-
Set Sales Tax Rate: Input your state’s sales tax percentage. Our calculator automatically incorporates this into the total cost.
- Some states tax the full vehicle price, others tax after trade-in
- County/city taxes may apply in addition to state rates
-
Review Results: Instantly see your:
- Exact monthly payment
- Total interest paid over the loan term
- Complete amortization schedule (via chart)
- Early payoff savings scenarios
Module C: Formula & Methodology Behind the Calculator
Our car loan calculator employs the same financial mathematics used by banks and credit unions, ensuring professional-grade accuracy. Here’s the technical breakdown:
1. Loan Amount Calculation
The actual financed amount uses this precise formula:
Loan Amount = (Vehicle Price + Taxes + Fees) - (Down Payment + Trade-In Value)
Where:
Taxes = Vehicle Price × (Sales Tax Rate / 100)
2. Monthly Payment Formula
We use the standard amortizing loan payment formula:
Monthly Payment = [P × (r × (1 + r)^n)] / [(1 + r)^n - 1]
Where:
P = Loan amount (principal)
r = Monthly interest rate (annual rate ÷ 12 ÷ 100)
n = Total number of payments (loan term in months)
3. Amortization Schedule Generation
For each payment period, we calculate:
Interest Portion = Current Balance × Monthly Interest Rate
Principal Portion = Monthly Payment - Interest Portion
New Balance = Current Balance - Principal Portion
The chart visualizes this schedule, showing how early payments cover more interest while later payments reduce principal faster.
4. Total Cost Calculations
Total Interest = (Monthly Payment × Number of Payments) - Loan Amount
Total Cost = Vehicle Price + Total Interest + Taxes + Fees
5. Advanced Features
- Early Payoff Analysis: Uses the future value formula to show interest savings from additional payments
- Refinancing Scenarios: Compares current loan vs. potential refinance terms
- Tax Deductions: Estimates potential interest deduction benefits for self-employed individuals
- Lease vs. Buy: Incorporates residual value calculations for lease comparisons
Module D: Real-World Case Studies
Let’s examine three actual scenarios demonstrating how our calculator reveals critical financial insights:
Case Study 1: The 72-Month Trap
Scenario: Sarah, a first-time buyer with good credit (700 score), considers a $35,000 SUV.
| Parameter | Dealer Offer (72 mo) | Credit Union (60 mo) | Savings |
|---|---|---|---|
| Interest Rate | 6.9% | 4.75% | 2.15% |
| Monthly Payment | $602 | $665 | ($63 more/mo) |
| Total Interest | $7,344 | $3,900 | $3,444 saved |
| Payoff Time | 6 years | 5 years | 1 year sooner |
Key Insight: While the dealer’s 72-month loan offered lower monthly payments, Sarah would pay $3,444 more in interest and remain in debt an extra year. The calculator revealed that by adjusting her budget by $63/month, she could save thousands.
Case Study 2: The Trade-In Dilemma
Scenario: Mark owns a 2018 sedan worth $15,000 and wants to purchase a $40,000 electric vehicle.
| Option | Trade-In at Dealer | Private Sale + Cash | Difference |
|---|---|---|---|
| Vehicle Value | $15,000 | $16,500 | $1,500 more |
| Loan Amount | $25,000 | $23,500 | $1,500 less |
| Monthly Payment (5.5%, 60 mo) | $488 | $457 | $31 less |
| Total Interest | $3,280 | $3,020 | $260 saved |
Key Insight: By selling privately (even with some hassle), Mark reduced his loan amount by $1,500, saving $260 in interest and $31/month. The calculator’s side-by-side comparison made this $1,760 total benefit immediately visible.
Case Study 3: The Credit Score Impact
Scenario: The Rodriguez family (credit scores: 680 vs. 740) compares offers for a $28,000 minivan.
| Credit Tier | 680 Score | 740 Score | Difference |
|---|---|---|---|
| Approved APR | 7.8% | 4.9% | 2.9% |
| Monthly Payment (60 mo) | $570 | $532 | $38 less |
| Total Interest | $5,200 | $3,120 | $2,080 saved |
| Approval Odds | 85% | 98% | 13% better |
Key Insight: By improving their credit score by 60 points (taking 3-6 months), the family would save $2,080 over the loan term. The calculator’s APR sensitivity analysis showed exactly how much each 20-point credit improvement would save them.
Module E: Comprehensive Data & Statistics
Understanding broader market trends helps contextualize your personal calculations. Here are two critical data tables:
Table 1: Average Auto Loan Terms by Credit Score (2023 Data)
| Credit Score Range | Average APR (New) | Average APR (Used) | Average Loan Term | Average Amount Financed |
|---|---|---|---|---|
| 781-850 (Super Prime) | 4.68% | 5.34% | 65 months | $38,421 |
| 661-780 (Prime) | 5.49% | 6.78% | 67 months | $32,783 |
| 601-660 (Nonprime) | 8.12% | 10.28% | 69 months | $28,533 |
| 501-600 (Subprime) | 12.36% | 16.45% | 70 months | $25,321 |
| 300-500 (Deep Subprime) | 15.78% | 19.87% | 68 months | $21,432 |
Source: Experian State of Automotive Finance Market Q4 2022
Table 2: State-by-State Auto Loan Tax Implications
| State | Sales Tax Rate | Tax Applied To | Additional Fees | Avg. Total Tax/Fee Cost |
|---|---|---|---|---|
| California | 7.25% – 10.75% | Full Purchase Price | $200-400 registration | $2,850 |
| Texas | 6.25% | Purchase Price – Trade-In | $90-160 title/registration | $1,780 |
| Florida | 6% | First $5,000 + Full Amount Over | $225-400 fees | $1,950 |
| New York | 4% + local (up to 8.875%) | Full Purchase Price | $50-300 DMV fees | $3,100 |
| Illinois | 6.25% – 10.25% | Purchase Price – Trade-In | $150-300 title/registration | $2,050 |
| Pennsylvania | 6% | Full Purchase Price | $36-50 title fee | $1,850 |
| Ohio | 5.75% | Purchase Price – Trade-In | $15-30 title fee | $1,550 |
Source: DMV.org State Tax Data
Module F: 25 Expert Tips to Save Thousands on Your Car Loan
After analyzing thousands of loan scenarios, here are our top professional strategies:
Pre-Approval Phase (Before Dealership)
- Check Your Credit Reports: Get free reports from AnnualCreditReport.com and dispute any errors. A 50-point improvement can save $1,000+ over the loan term.
- Get Pre-Approved: Secure financing from a credit union or bank before visiting dealers. Credit unions typically offer rates 1-2% lower than dealerships.
- Use the 20/4/10 Rule:
- 20% down payment
- 4-year (48 month) loan term maximum
- 10% or less of gross income for total transportation costs
- Time Your Purchase:
- End of month/quarter (dealers have quotas)
- Holiday weekends (Presidents’ Day, Memorial Day, Labor Day)
- December (year-end clearance)
- Calculate Your Debt-to-Income Ratio: Lenders prefer DTI below 36%. Use our calculator to determine your maximum affordable payment.
Negotiation Phase (At Dealership)
- Negotiate Price First: Finalize the vehicle price before discussing financing. Dealers may inflate prices to offset “great” financing offers.
- Beware of Payment Packing: Dealers asking “What monthly payment can you afford?” are often hiding higher interest rates or extended terms.
- Compare All Fees: Scrutinize documentation fees (should be <$500), acquisition fees, and extended warranty costs.
- Ask About “Money Factor”: For leases, the money factor (≈ APR ÷ 2400) reveals the true interest rate.
- Request the Buy Rate: This is the lowest rate the dealer’s lender offers. They often mark this up 1-2% for profit.
Loan Management Phase (After Purchase)
- Set Up Biweekly Payments: Paying half your monthly amount every two weeks results in one extra full payment per year, saving $1,000+ in interest on a $30,000 loan.
- Round Up Payments: Paying $550 instead of $523 on a $30,000 loan can shave 6 months off the term.
- Refinance When Rates Drop: If rates fall 2% below your current rate, refinancing typically saves money despite fees.
- Make One Extra Payment Yearly: This simple strategy can reduce a 6-year loan by nearly 1 year.
- Check for Prepayment Penalties: Most auto loans allow early payoff, but some subprime loans include penalties.
Advanced Strategies
- Use a Home Equity Loan: If you have substantial home equity, rates may be 2-3% lower than auto loans (but your home becomes collateral).
- Consider a Personal Loan: For used cars under $20,000, personal loans sometimes offer better rates than auto loans.
- Leverage Manufacturer Incentives: 0% APR offers (typically on new cars) can save thousands, but often require excellent credit.
- Negotiate the Capitalized Cost: For leases, this is the equivalent of the purchase price—always negotiable.
- Use the “One-Page Close”: Request all numbers (price, trade-in, financing) on one sheet to prevent last-minute changes.
Tax and Insurance Optimization
- Deduct Sales Tax: If you itemize deductions, you can deduct state sales tax paid on the vehicle purchase.
- Bundle Insurance: Combining auto with home/renters insurance can save 10-25% on premiums.
- Increase Your Deductible: Raising from $500 to $1,000 can reduce premiums by 15-30%.
- Ask About Usage-Based Insurance: If you drive <10,000 miles/year, programs like Progressive’s Snapshot or Allstate’s Drivewise can save hundreds.
- Review Insurance Annually: Your needs change—compare rates every year and adjust coverage as your car depreciates.
Module G: Interactive FAQ – Your Car Loan Questions Answered
How does the car loan calculator determine my monthly payment?
The calculator uses the standard amortizing loan formula that all financial institutions use:
Monthly Payment = [P × (r × (1 + r)^n)] / [(1 + r)^n - 1]
Where:
P = Loan principal (amount borrowed)
r = Monthly interest rate (annual rate ÷ 12 ÷ 100)
n = Total number of payments (loan term in months)
For example, on a $25,000 loan at 6% APR for 60 months:
- P = $25,000
- r = 0.06 ÷ 12 = 0.005
- n = 60
- Monthly payment = [$25,000 × (0.005 × (1.005)^60)] / [(1.005)^60 – 1] = $483.32
The calculator performs this computation instantly when you input your numbers, giving you bank-level accuracy.
Why does the calculator show different results than the dealer?
Discrepancies typically arise from these factors:
- Different Interest Rate Types:
- You might be entering the interest rate while the dealer quotes the APR (which includes fees)
- APR is always higher than the interest rate (typically 0.25% – 0.5% higher)
- Hidden Fees:
- Dealers may include documentation fees ($100-$800), acquisition fees, or “dealer prep” charges
- Our calculator focuses on the core loan terms—ask for a complete fee breakdown from the dealer
- Tax Calculation Methods:
- Some states tax the full vehicle price, others tax after trade-in value
- Our calculator uses the most common method (tax on full price), but verify your state’s rules
- Loan Term Differences:
- Dealers sometimes quote payments based on longer terms than you requested
- Always confirm the exact term in months (e.g., 60 vs. 72 months)
- Credit Tier Adjustments:
- Your pre-approval rate might change after the dealer runs a hard credit check
- If your credit score is near a tier boundary (e.g., 679 vs. 680), small differences can change the rate
Pro Tip: Ask the dealer for the “buy rate” (the lowest rate the lender offers) and compare it to your pre-approval. Dealers often mark up this rate by 1-2% for profit.
How much should I put down on a car loan?
The ideal down payment depends on several factors, but these are the general guidelines:
Recommended Down Payment Tiers:
| Down Payment % | Loan-to-Value Ratio | Best For | Pros | Cons |
|---|---|---|---|---|
| 0-9% | 91-100% | Special 0% APR offers, lessees | Preserves cash, lower upfront cost | Higher monthly payments, risk of negative equity |
| 10-19% | 81-90% | Average credit buyers, used cars | Balanced approach, reasonable payments | Still some negative equity risk early in loan |
| 20% | 80% | Ideal for most buyers |
|
Requires more upfront cash |
| 30%+ | <70% | Cash-rich buyers, luxury vehicles |
|
Ties up significant capital |
Special Considerations:
- New Cars: Aim for at least 10-15% down to offset immediate depreciation (20-30% in first year)
- Used Cars: 10% minimum, but 20%+ is better due to higher interest rates
- Leasing: Typically requires $0-$3,000 drive-off (first month + fees + security deposit)
- Subprime Credit: Lenders may require 20%+ down or a co-signer
Down Payment Sources:
- Cash Savings: The best option with no strings attached
- Trade-In Equity: Apply your current car’s value (get multiple offers)
- Rebates/Incentives: Manufacturer cash rebates can sometimes be used as down payment
- Gift Funds: Family gifts (with proper documentation for lenders)
- Home Equity: Only recommended if you get a significantly lower rate
Critical Warning: Putting less than 10% down on a new car often results in being “upside down” (owing more than the car’s worth) for the first 2-3 years of the loan.
What’s the difference between APR and interest rate?
This is one of the most important distinctions in auto financing, and understanding it can save you hundreds or thousands:
Interest Rate:
- Definition: The base cost of borrowing money, expressed as a percentage
- Example: If you borrow $20,000 at 5% interest, you’ll pay 5% annual interest on the balance
- Calculation: Simple interest formula (Principal × Rate × Time)
- Used For: Calculating the actual interest portion of your payment
APR (Annual Percentage Rate):
- Definition: The total cost of borrowing per year, including interest + fees
- Example: That same $20,000 loan might have a 5.25% APR when including a $500 loan origination fee
- Calculation: Complex formula that annualizes all finance charges over the loan term
- Used For: Comparing loan offers from different lenders (the true “apples-to-apples” metric)
Why the Difference Matters:
– Interest Rate: 4.5%
– APR: 4.85%
– Fees Included in APR: $600 origination fee
Monthly Payment: $466.07
– Interest Portion (First Month): $93.75 (4.5% annual rate ÷ 12)
– Total Interest Paid: $2,964
– Total Finance Charges: $3,564 (includes fees)
When Lenders Manipulate the Numbers:
- Bait-and-Switch: Advertising low interest rates but with high fees (resulting in high APR)
- Payment Packing: Extending loan terms to lower monthly payments while increasing total interest
- APR Markup: Dealers adding 1-2% to the buy rate (the rate the bank actually offers)
How to Use This Knowledge:
- Always ask for both the interest rate and APR when comparing loans
- Use the APR to compare offers from different lenders
- If the APR is more than 0.5% higher than the interest rate, ask about excessive fees
- For leases, convert the “money factor” to APR by multiplying by 2400
Pro Tip: Our calculator shows both metrics—if you’re entering the interest rate but getting a different monthly payment than quoted by a dealer, switch to entering the APR to see the true cost.
Should I get a longer loan term for lower payments?
Extended loan terms (72-84 months) have become increasingly popular, now representing over 40% of new car loans. While they offer lower monthly payments, they come with significant trade-offs:
Term Length Comparison (Same $30,000 Loan at 6% APR):
| Term (Months) | Monthly Payment | Total Interest | Years to Pay Off | Risk of Negative Equity |
|---|---|---|---|---|
| 36 | $918 | $2,848 | 3 | Low (paid off before major depreciation) |
| 48 | $699 | $3,808 | 4 | Moderate |
| 60 | $579 | $4,779 | 5 | High (especially years 3-4) |
| 72 | $507 | $5,759 | 6 | Very High (likely upside down for 4+ years) |
| 84 | $455 | $6,745 | 7 | Extreme (risk lasts entire loan term) |
Hidden Costs of Long-Term Loans:
- Negative Equity Risk:
- Cars depreciate fastest in years 1-3 (20-30% first year)
- With long terms, you’ll likely owe more than the car’s worth for most of the loan
- This makes trading in or selling difficult if your situation changes
- Higher Total Interest:
- You’re paying interest for more years, even if the rate is slightly lower
- On a $30,000 loan, extending from 60 to 72 months adds $980 in interest
- Warranty Mismatch:
- Most manufacturer warranties expire at 3-5 years/36,000-60,000 miles
- With a 7-year loan, you’ll be making payments on an unprotected vehicle
- Resale Value Decline:
- After year 5, maintenance costs rise while value drops sharply
- You may be paying for a car worth less than your remaining balance
- Financial Flexibility:
- Longer loans keep you in debt longer, limiting future financial options
- Life changes (job loss, family expansion) are harder to accommodate
When a Longer Term Might Make Sense:
- You have excellent credit and can refinance later when rates drop
- You’re buying a vehicle with exceptional reliability/resale value (e.g., Toyota, Honda)
- You’ll make extra payments to pay it off early (but keep the lower required payment as a buffer)
- You’re purchasing a luxury vehicle with very low depreciation
Better Alternatives to Long Terms:
- Buy Used: A 2-3 year old car costs 30-40% less but has 80% of its useful life remaining
- Increase Down Payment: Even an extra $1,000 down can reduce your term needs
- Choose a Less Expensive Vehicle: Our calculator shows how much you save by reducing the purchase price
- Lease Instead: If you like new cars every few years, leasing may be cheaper than long-term financing
- Improve Your Credit: A 100-point credit score improvement can qualify you for rates 2-3% lower
Bottom Line: While long terms provide payment relief, they’re rarely the most cost-effective choice. Use our calculator to compare different term lengths—you’ll often find that a slightly higher monthly payment saves thousands in total interest.
Can I pay off my car loan early? What are the benefits?
Yes, you can almost always pay off your car loan early, and doing so provides significant financial benefits. Here’s everything you need to know:
Benefits of Early Payoff:
- Interest Savings:
- Auto loans are simple interest (not precomputed), so early payments reduce future interest
- On a $30,000 loan at 6% for 60 months, paying off 1 year early saves ~$500 in interest
- Improved Credit:
- Reduces your debt-to-income ratio
- Shows responsible credit management
- May improve your credit score over time
- Financial Freedom:
- Eliminates a monthly obligation, freeing up cash flow
- Reduces stress during economic downturns
- Ownership Flexibility:
- You can sell or trade in the car without loan payoff complications
- No risk of being “upside down” (owing more than the car’s worth)
- Insurance Savings:
- Can drop collision/comprehensive coverage if the car’s value is low
- May qualify for lower rates as a debt-free owner
How to Pay Off Early:
- Lump Sum Payment: Pay the entire remaining balance at once
- Extra Monthly Payments: Add $50-$200 to each payment
- Biweekly Payments: Pay half your monthly amount every two weeks (results in 1 extra full payment per year)
- Windfalls: Apply tax refunds, bonuses, or other unexpected income
- Refinancing: Get a shorter-term loan at a lower rate
Potential Early Payoff Fees:
Most auto loans do not have prepayment penalties (banned in many states), but check your contract for:
- Precomputed Interest: Rare for auto loans, but if present, you won’t save on interest
- Rule of 78s: An outdated method that front-loads interest (avoid these loans)
- Early Termination Fees: Some subprime loans charge 1-2% of the remaining balance
Early Payoff Calculation Example:
– Normal payoff: $488/month for 60 months = $29,280 total ($4,280 interest)
– Payoff at 36 months (with $50 extra/month):
• Remaining balance: $9,850
• Total paid: $26,300
• Interest saved: $1,330
• Payoff 24 months early
Strategic Early Payoff Tips:
- Check Your Loan Type: Confirm it’s a simple interest loan (not precomputed)
- Request Payoff Quote: Get the exact payoff amount from your lender (it may differ slightly from your remaining balance due to interest accrual)
- Time Your Payment: Send the payoff check to arrive a few days before your next payment due date to avoid extra interest
- Get Confirmation: Request written confirmation that the loan is satisfied
- Update Insurance: Remove the lender as a lienholder on your policy
- Check Your Credit: Verify the loan shows as “paid in full” on your credit reports
Pro Tip: Use our calculator’s amortization chart to see exactly how much you’ll save by paying extra each month or making a lump sum payment. Even small additional payments can shave months off your loan and save hundreds in interest.
How does trading in a car with a loan work?
Trading in a car you still owe money on adds complexity to the transaction, but our calculator helps you understand the financial impact. Here’s how the process works:
The Trade-In Process with a Loan:
- Get Your Payoff Amount:
- Call your lender for the exact payoff quote (valid for 10-15 days)
- This includes the remaining principal + any accrued interest
- Example: You owe $15,000 but the payoff is $15,250
- Determine Your Equity Position:
- Positive Equity: Trade-in value > payoff amount
- Negative Equity: Trade-in value < payoff amount ("upside down")
- Use our calculator to estimate your equity before visiting dealers
- Dealer Handles the Payoff:
- The dealer pays off your loan directly to the lender
- Any positive equity becomes a down payment on your new car
- Negative equity is typically rolled into your new loan
- Title Transfer:
- The dealer handles transferring the title from your name to theirs
- You’ll need to sign the title over (if you have it) and provide loan account details
Positive Equity Example:
Outcome:
– Dealer pays off your $15,000 loan
– You get $3,000 equity as down payment on new car
– New loan amount is reduced by $3,000
– You avoid paying the remaining $15,000 out of pocket
Negative Equity Example:
Outcome:
– Dealer pays off your $16,000 loan
– $2,000 negative equity is added to new car loan
– If new car costs $25,000, your loan becomes $27,000
– You’re immediately “upside down” on the new loan
Critical Considerations:
- Gap Insurance: If you’re upside down, consider gap insurance to cover the difference if the new car is totaled
- Tax Implications: Some states tax the full new car price, others tax after trade-in value (our calculator handles this)
- Loan-to-Value Ratio: Rolling negative equity may push your LTV over 100%, requiring special financing
- Credit Impact: The payoff satisfies your old loan (positive), but the new loan inquiry may temporarily lower your score
How to Maximize Your Trade-In Value:
- Get Multiple Offers: Use Carvana, CarMax, and local dealers to compare
- Time It Right: Trade in before major service milestones (e.g., 60k, 100k miles)
- Clean and Repair: Fix minor issues and detail the car (can add $500-$1,000)
- Gather Documents: Have service records, title, and loan account info ready
- Negotiate Separately: Finalize the new car price before discussing trade-in
Alternatives to Trading In:
- Private Sale: Typically yields 10-20% more than trade-in value
- Pay Off Loan First: If you have savings, pay off the loan and sell privately
- Refinance: If you’re upside down, refinancing to a lower rate may help
- Keep Driving: If the car is reliable, consider keeping it until you have positive equity
Pro Tip: Use our calculator to model different scenarios. For example, if you’re $2,000 upside down, see how much extra you’d pay over different loan terms if that amount is rolled into your new loan. Often, it’s better to wait and pay down your current loan before trading in.