You have your eye on the vehicle that best fits your needs and lifestyle. Now it’s time to research how much your monthly payment will be. There are several factors involved in determining your monthly car payment. Continue reading below to learn more about these factors.

How do car payments work?

It's important to understand how car payments work. Car loans are paid to the lender in monthly installments or loan payments. The lender can be related to the car manufacturer, known as the captive finance company, a bank or credit union. Auto loan monthly payments are designed to be paid back to the lender, over a set time. Monthly payments depend on the amount of the loan, the loan term and the interest amount over the course of the loan.

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Factors that determine your car payment

Because monthly payments are dependent on various factors, it is important to consider all of the variables.


  • Interest Rate

  • Principal

  • Credit Score

  • Loan Term

  • Vehicle Age

You can use the Nissan Payment Estimator tool to estimate your monthly payment on a lease or when financing your Nissan vehicle. [[3370]]

Interest rate

The higher your interest rate is, the higher your total monthly payment will be. Your interest rate can be affected by a range of factors including: credit score, loan term, vehicle age, and lender.


The principal is an important factor when determining your average monthly car payment. This is because it's the amount of money you borrow to purchase your car. For example, if your loan amount is $20,000, you'll probably have a lower monthly payment than if you borrow a larger amount such as $30,000. 

Certain variables such as your credit score, down payment amount, loan term, and APR rate will be contributing factors in your monthly payment.

Credit score

A car loan applicant with a credit score of 700 or higher, should expect to pay anywhere from 0 to 6 percent interest on their loan. Interest rates may be higher for financing a used cars. Loan applicants with a credit score of 600 or lower could potentially have interest rates between 10 to 20 percent.

Loan term

The length of a car loan term affects your average monthly car payment. A longer loan term will likely result in a lower monthly car payment, with higher interest rates being paid to the lender over the duration of the loan. Whereas a shorter loan term generally creates higher monthly car payments, with less interest paid to the lender over the duration of the car loan. [[3370]]

Vehicle age

When factoring in vehicle age, you'll notice that interest rates for used cars generally tend to be higher than interest rates of new cars. According to Experian’s  State of the Automotive Finance Market report, the average interest rate on a used car loan was 9.65% in the first quarter of 2020, compared to 5.61%  on a new-car loan.

Estimating your car payment

Nissan has a variety of tools to help you estimate your monthly payment. Start by checking your credit score. Then, use the payment calculator to estimate monthly payments on a lease or financed vehicle. You'll see that depending on  your down payment, loan terms and credit score, all these variables come together to estimate your monthly payment. Go ahead and get started. You have all the tools you need to start shopping for your new Nissan online, right from home. [[3180]]

Woman Sitting In Driver Seat Smiling
Service Technician Showing Tablet To Two Other People

Leasing options

After deciding on a vehicle, you'll have the option to either lease or buy. There's no right answer. It's what's right for you. Your monthly payment will vary depending on whether you lease or finance.

Vehicle leasing allows you to drive a new vehicle through borrowing, without paying for the total MSRP of the car. It is essentially a contract for a specified length of time, paid through monthly payments. At the end of the term, the vehicle is returned to the dealership it was leased from.

Leasing is ideal for people who drive less than 15,000 miles per year, take good care of their vehicle, and want a new car every 2-4 years.

NMAC SignatureLEASE® offers more choices than your average lease program. Terms range from 24–60 months. Visit your Nissan Dealer to get details and learn about specific terms.

For what to expect as your lease matures, check out our End of Lease information.

Finance options

Purchasing is ideal for people who drive a lot, put their vehicles through heavy use, or are looking to build equity. It also gives you more freedom to customize your car as you please.

With NMAC SignaturePURCHASE® competitive interest rates and quick credit responses, Nissan can help you make your car-buying dream a reality. SignaturePURCHASE® terms range from 12–84 months and are available for new and pre-owned Nissan vehicles, as well as other pre-owned vehicles less than six years old.

Still unsure which option to go with? Read more about Finance Options at Nissan.

Two People Smiling While Browsing Tablet

Many car buyers choose to finance their car loan at the dealership where they purchase the vehicle, making the process slightly more streamlined. A benefit of financing with a dealership is taking advantage of any potential promotions, such as 0% or low APR rates for well qualified buyers. Looking to explore financing options without heading to a dealership? With NISSAN@HOME you may have access to the same deals and financing opportunities (available at participating dealerships). [[3365]]

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Ready to take the next step?

Now that you know what factors to consider when estimating your total monthly payment, you can build and price your Nissan right from the comfort of your home.[[3365]]

*All material in each article on this webpage are intended for general informational purposes only and was accurate as of the date of first publication. Information is subject to change and does not constitute an offer, representation or warranty (express or implied) by Nissan North America, Inc. ("Company"). Interested parties should confirm the accuracy of any information in this website as it relates to a vehicle directly with Company before relying on it to make a purchase decision. Unless expressly referenced, Company does not endorse and is not affiliated with any company that might be mentioned in any article on this webpage. Company is not responsible or liable for the availability of links to websites or resources, or for any content, advertising, products, services, privacy policies, or other materials on or available through these websites or resources, or for your reliance thereon. Any references to data or products are subject to change without notice. Trademarks are property of their respective owners.

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