Car Finance Calculator (Balloon Payment)
Work out the monthly payment for car finance with a down payment and a balloon payment, and see what driving really costs you, also per kilometer.
Monthly payment
$589.90
20,000 km
Total monthly cost
$839.90
Per kilometer
$0.50
Total interest
$5,315
Balloon payment at the end
$12,000
What does driving cost over the whole term?
- Depreciation of the vehicle $23,000 57.1%
- Interest $5,315 13.2%
- Other costs $12,000 29.8%
Total $40,315
Please note: This is an example calculation, not financial advice. Personal circumstances, changes in rules and rates, and additional costs are not included. If in doubt, talk to a financial adviser.
Fees, sales tax, insurance excess, tax on company cars and mileage limits are not included.
How this number is calculated
The blocks use your input. Change a value above and they update with it.
Step 1 · Interest per month
Step 2 · Amount financed
Step 3 · Monthly payment
Step 4 · Total interest
Step 5 · Total cost of driving
Step 6 · Per kilometer
How the calculation works
Work out your monthly payment for car finance with a down payment and a balloon payment at the end. You also see what driving costs in total: the payment plus your other costs, per month and per kilometer, and where the money goes over the whole term.
With this kind of car finance you borrow the vehicle price minus your down payment and pay it back in monthly payments, with interest. At the end a balloon payment is left: the part you do not repay through the monthly payments, which makes them lower. Interest is charged on what you still owe; the calculator uses one fixed rate for the whole term.
On top of that come your other monthly costs, such as insurance, maintenance, tires and road tax. Together with depreciation (the price minus the balloon payment) and the interest, that is what driving costs over the whole term. The cost per kilometer is the payment plus the other costs, divided by the kilometers per month.
Formula
Monthly rate r = yearly rate ÷ 12 ÷ 100, n = term in months, amount financed = price − down payment. Payment = (amount financed − balloon ÷ (1 + r)^n) × r ÷ (1 − (1 + r)^−n); at 0% (amount financed − balloon) ÷ n. Total interest = payment × n + balloon − amount financed. Per kilometer = (payment + other costs) × 12 ÷ kilometers per year.
Assumptions
- The interest rate stays the same for the whole term; each month uses a twelfth of the yearly rate.
- Each payment is made at the end of the month, the balloon payment at the end of the term.
- The vehicle is worth the balloon payment at the end: depreciation is the price minus the balloon payment.
- Fees, sales tax, insurance excess, tax on company cars and mileage limits are not included.
Example calculations
The button fills in the calculator above, so you can carry on from there.
-
Mid-size car
Monthly payment
$589.90
Vehicle price $35,000.00 · Down payment $0.00 · Balloon payment $12,000.00 · Term (months) 48 · Interest rate per year (%) 5.5 · Other costs per month $250.00 · Distance per year 20,000 km
-
Van
Monthly payment
$450.99
Vehicle price $30,000.00 · Down payment $0.00 · Balloon payment $9,000.00 · Term (months) 60 · Interest rate per year (%) 6 · Other costs per month $300.00 · Distance per year 30,000 km
-
Electric car with down payment
Monthly payment
$682.75
Vehicle price $45,000.00 · Down payment $5,000.00 · Balloon payment $20,000.00 · Term (months) 36 · Interest rate per year (%) 5 · Other costs per month $175.00 · Distance per year 12,500 km
Frequently asked questions
What is car finance with a balloon payment?
You borrow the price of the vehicle minus your down payment and repay it with interest in monthly payments, except for a final balloon payment at the end. Because part of the loan is left until the end, the monthly payments are lower. In the Netherlands this is called financial lease.
Is this the same as leasing a car?
No. With a lease you rent the car for a fixed monthly amount and hand it back at the end; that amount is set by the leasing company, often with a money factor and fees, and does not follow from this formula. This calculator is about financing a vehicle with a balloon payment.
What is the balloon payment?
The amount still owed at the end of the term. A higher balloon payment gives a lower monthly payment, but you pay interest on that amount for the whole term. At the end you pay it in one go, or you sell or refinance the vehicle.
Why is my quote higher than this result?
A quote can include fees, sales tax or insurance, or use a different rate or payments at the start of each month instead of at the end. This calculator only uses what you enter.
How is the cost per kilometer worked out?
The monthly payment plus the other monthly costs, divided by the kilometers per month (kilometers per year ÷ 12). In the example: (589.90 + 250) ÷ (20,000 ÷ 12) = 0.50 per kilometer. If you enter miles, the calculator converts them to kilometers.
What happens to my payment when the interest rate changes?
A higher rate gives a higher payment. For 35,000 over 48 months with a balloon payment of 12,000, the payment is 589.90 at 5.5% and 620.76 at 7%. The calculator uses one fixed rate; if the rate changes during the term, the payment changes from then on.
Sources and checks
Sources
- What is a balloon payment? When is one allowed? | Consumer Financial Protection Bureau
- What should I know about leasing versus buying a car? | Consumer Financial Protection Bureau
How we check it
This calculator has 18 fixed checks: 11 calculations with a result that is fixed in advance, and 7 cases of invalid input that must be rejected. They all run automatically every time we publish; if one fails, the calculator does not go live.
See the calculations
- Vehicle price $35,000.00 · Down payment $0.00 · Balloon payment $12,000.00 · Term (months) 48 · Interest rate per year (%) 5.5 · Other costs per month $250.00 · Distance per year 20,000 km → Monthly payment $589.90
- Vehicle price $30,000.00 · Down payment $0.00 · Balloon payment $9,000.00 · Term (months) 60 · Interest rate per year (%) 6 · Other costs per month $300.00 · Distance per year 30,000 km → Monthly payment $450.99
- Vehicle price $45,000.00 · Down payment $5,000.00 · Balloon payment $20,000.00 · Term (months) 36 · Interest rate per year (%) 5 · Other costs per month $175.00 · Distance per year 12,500 km → Monthly payment $682.75
- Vehicle price $35,000.00 · Down payment $0.00 · Balloon payment $12,000.00 · Term (months) 48 · Interest rate per year (%) 0 · Other costs per month $250.00 · Distance per year 20,000 km → Monthly payment $479.17
- Vehicle price $35,000.00 · Down payment $0.00 · Balloon payment $0.00 · Term (months) 48 · Interest rate per year (%) 5.5 · Other costs per month $250.00 · Distance per year 20,000 km → Monthly payment $813.98
- Vehicle price $35,000.00 · Down payment $0.00 · Balloon payment $30,000.00 · Term (months) 48 · Interest rate per year (%) 5.5 · Other costs per month $250.00 · Distance per year 20,000 km → Monthly payment $253.78
- Vehicle price $35,000.00 · Down payment $10,000.00 · Balloon payment $12,000.00 · Term (months) 48 · Interest rate per year (%) 5.5 · Other costs per month $250.00 · Distance per year 20,000 km → Monthly payment $357.33
- Vehicle price $35,000.00 · Down payment $0.00 · Balloon payment $12,000.00 · Term (months) 48 · Interest rate per year (%) 7 · Other costs per month $250.00 · Distance per year 20,000 km → Monthly payment $620.76
- Vehicle price $35,000.00 · Down payment $0.00 · Balloon payment $12,000.00 · Term (months) 48 · Interest rate per year (%) 5.5 · Other costs per month $250.00 · Distance per year 12,427.42 mi → Monthly payment $589.90
- Vehicle price $12,000.00 · Down payment $0.00 · Balloon payment $0.00 · Term (months) 1 · Interest rate per year (%) 5.5 · Other costs per month $250.00 · Distance per year 20,000 km → Monthly payment $12,055.00
Changes
- : First version. Sources added and content reviewed.
Last reviewed: · How we build and check our calculators
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