Car Loan Simulator
Plan your auto loan payoff — add extra payments and see how quickly you can own your car outright.
Open Simulator →Why Pay Off Your Car Loan Early?
Car loans typically run 4-7 years at 5-10% interest. On a $35,000 auto loan at 7% for 6 years, you'll pay $7,600 in interest. Paying just $100 extra per month saves $1,800 and pays off 10 months early. A car is a depreciating asset — the faster you pay it off, the less you spend on something losing value every day.
Unlike mortgages, car loan interest isn't tax-deductible. Every dollar of interest paid is pure cost with no offset. That makes prepayment especially attractive for auto loans.
Car Loan Payoff Tips
- Round up payments — if your payment is $487, pay $500 or $550
- Apply windfalls — tax refunds and bonuses directly to principal
- Refinance if rates dropped — even 1% lower saves hundreds over the remaining term
- Check for prepayment penalties — most auto loans don't have them, but some do
- Don't extend the term — a longer loan means paying more for a car worth less