Does your payment add up?
The Federal Reserve's average rate on a 60-month new-car loan at commercial banks was 7.54% (August 2026). It is an average across many borrowers, a yardstick to read a quoted rate against and not an offer.
federalreserve.gov · checked Nov 11, 2026
By Mr. Voltage · Data checked Nov 11, 2026 · Page changed Oct 30, 2026
Where will you register the car?
Harris County, Texas
Example quotes. Pick your place and type yours. Example: three quotes on one car in Harris County, Texas. Pick your own place and type your quotes.
Your numbers stay in this browser.
Type what you agreed and the payment the dealer quoted. We work out what that payment can repay.
Amount financed $30,159.75 (from Deal A)
Type the payment the dealer quoted to see the result.
Estimate. Your dealer’s buyer’s order and your lender’s disclosures are the numbers that count. Check them against this.
What can fill a gap like this
A quoted payment can carry more than the price, rate and term you agreed for a few plain reasons: an add-on such as a service contract or GAP was put into the loan, a fee was added that was not on your buyer’s order, the first payment is due on a different day than a month out, the term is longer, or the rate is higher than the one you agreed.
Payment packing is a term for a quoted payment that includes products or fees beyond the agreed price, folded into the monthly figure instead of listed one by one.
Dealer reserve (also called dealer participation) is the part of a loan’s interest a lender may share with the dealer that arranged it, when the rate on the contract is higher than the rate the lender set for the buyer. How often that happens, and how much, differs by dealer and lender.
Ask for the buyer’s order and the contract, and ask the dealer to show each line of the amount financed.
If you believe something was added without your agreement, you can tell the Consumer Financial Protection Bureau. consumerfinance.gov/complaint
Can the dealer beat your credit union's rate?
It can, and it can also be the other way round. A dealer arranges a loan through the lenders it works with, and a credit union or bank may offer you a rate of its own. The only way to tell is to put the two rates side by side, in writing, with the same amount financed and the same term.
A quoted payment hides the rate. The check turns it back into one: the rate your payment implies for the agreed loan and term, 8.50% in the second example below. Set that beside a pre-approval from your own lender, and beside the yardstick above.
federalreserve.gov · checked Nov 11, 2026
Worked examples
Each line below is worked by the same engine as the calculator, on the day this page was built (Nov 11, 2026).
A quote that matches the agreed numbers
The agreed numbers are $32,534.75 financed at 5.90% over 60 months, the loan on the new-car example's deal. The dealer's paper quotes $627.48 a month. The check says: This payment matches your agreed numbers, to the cent.
| Line | Amount |
|---|---|
| Your numbers need | $627.48 a month (last $627.16) |
| The dealer quoted | $627.48 a month |
| What $627.48 a month can repay | $32,534.95 |
| Your agreed loan | $32,534.75 |
| Difference | $0.20 |
| Rate the quote implies | 5.90% |
| Term the quote implies | 60.00 months (59 payments of $627.48, then $627.21) |
| Rounding | up to $0.52 is rounding |
| First payment date | up to $111.97 if your first payment is up to 21 days late, or $58.65 less if it’s up to 11 days early (type the date above) |
A quote that carries more than the agreed numbers
The agreed numbers are $32,534.75 financed at 5.90% over 60 months, the loan on the new-car example's deal. The dealer's paper quotes $667.48 a month. The check says: This payment carries $2,074.21 more than your agreed numbers need. That’s the same as $2,074.21 more in the loan at 5.90%, or an 8.50% rate on your agreed loan. A gap like this can be added products or a higher rate. Ask the dealer which, and to show you each line.
| Line | Amount |
|---|---|
| Your numbers need | $627.48 a month (last $627.16) |
| The dealer quoted | $667.48 a month (+$40.00) |
| What $667.48 a month can repay | $34,608.96 |
| Your agreed loan | $32,534.75 |
| Difference | $2,074.21 |
| Rate the quote implies | 8.50% |
| Term the quote implies | 55.86 months (55 payments of $667.48, then $575.08) |
| Rounding | up to $0.52 is rounding |
| First payment date | up to $111.97 if your first payment is up to 21 days late, or $58.65 less if it’s up to 11 days early (type the date above) |
| Not explained by rounding or dates | $1,962.24 |
Questions people ask
How do dealers calculate a monthly payment?
The same way any lender does. The amount financed is the out-the-door price (price, tax, title and registration fees, doc fee and any add-ons) less your cash down and trade-in equity, plus any negative equity. The rate and term turn that into one level payment that pays the loan off with interest by the last month, usually with the first payment a month after signing. In the new-car example, $32,534.75 at 5.90% over 60 months gives $627.48 a month and $5,113.73 of interest.
Why is my payment higher than an online calculator shows?
Most often the calculator started from the price, and the dealer's payment is worked from the amount financed, which includes tax, fees and any add-ons. A higher rate, a longer or shorter term, a trade-in with negative equity and a first payment due on a different day than a month out also change it. The check takes the agreed price, rate and term and shows how much of the gap they explain and how much they do not.
What interest rate does my payment really imply?
It is the rate that, on the agreed loan and term, gives exactly the quoted payment. In the second example, a quote of $667.48 a month on $32,534.75 over 60 months implies 8.50%, where the agreed rate was 5.90%. Type your own price, rate, term and quoted payment above to see yours.
How much can a dealer mark up my interest rate?
When a dealer arranges the loan, the rate a lender approves for you and the rate on the contract can differ, and the lender may share the difference with the dealer. That share is called dealer reserve. How much differs by lender and dealer, and this site does not hold a figure for how large a markup can be. What it can show is the rate your quoted payment implies, to set beside a rate from your own lender and beside the average. The Federal Reserve's average rate on a 60-month new-car loan at commercial banks was 7.54% (August 2026).
federalreserve.gov · checked Nov 11, 2026
What is payment packing?
Payment packing is a quoted payment that includes products or fees beyond the price you agreed, folded into the monthly figure instead of listed one by one. It can be an add-on such as a service contract or GAP, or a fee that was not on your buyer's order. The check shows how much more a quoted payment carries than your agreed numbers need; ask the dealer for the buyer's order and the contract, and for each line of the amount financed. If you think something was added without your agreement, you can tell the Consumer Financial Protection Bureau at consumerfinance.gov/complaint.