Predicting your monthly car payment can be tricky, as it depends on multiple factors. However, one luxury car salesman offers a simple way to figure it out. In a video that’s generated over 318,000 views as of this writing, Lexus salesman Noah (@deritgo) explains how you can determine your monthly car payment with an easy rule of thumb. How Can You Predict Your Car Payment? Noah says it’s simple to predict how much your payment is going to be before you ever step foot in a dealership. “I’m going to save you time from walking into the dealership, looking goofy, and pooping your pants when they tell you the payment,” he begins. He says you just take the price of the vehicle, divide it by $10,000, and multiply that by $200. “This is the easy rule I use to know your payment. Every $10,000 is going to equal $200 a month,” Noah shares. If you want to be even more specific about your payments, he says you should add about $20 for every $1,000. OWNERSHIP STORIES Viral stories from across the web Our team of experts tracks what owners are saying about car-shopping, repairs, the daily driving experience and more on social media. “Use this rule when looking at cars,” he suggests. So if you’re aiming for a $500 monthly car payment, at $50,000, an average priced new car is going to be well out of your budget. CNBC reports that the payments on a $50,000 car can be north of $1,000. Noah notes that you can lower your payments by putting money down or with a trade-in. The payment depends on how much you borrow, not how much the vehicle itself costs. “Any car can have any payment. We got a $65,000 S Class for sale S580 right now, that car could get $200 a month. You’re going to have to put $55K down. Any car can have any car payment, it just depends on the money down,” he says. Continuing, Noah clarifies this rule applies for people with good credit. “If you are a 580 demon, a 580 credit score goblin, the rules are out of the window,” he says. He notes that the majority of car loans are either 60 or 72 months and provides an example of payments on a 60-month loan. “So most car loans are 60 months. $10,000 divided by 60 months is about $166 then add in interest. You are looking around $200,” he concludes. BankRate’s auto loan calculator confirms that his math is pretty spot on. Gallery: 2026 Lexus Pricing Do People Believe His Formula Works? People were grateful to Noah for offering this simple advice. Basic financial literacy is not taught in many schools, so consumers often are flying blind when they make major purchases like a vehicle. “The information we needed,” one person commented on his post. “The fact you have to break it down like this is so wild I thought this was common knowledge,” said another. Other viewers verified that his formula works. “This is true. My 35k car is like 750 monthly,” one said. (Using Noah’s formula, the monthly payment on a $35,000 vehicle would be $700.) “My car was $24,600 and my payments are $433. I pay 500 instead,” another replied. Many viewers gave Noah various scenarios and asked for his calculations on monthly payments. “Man, I need a $250 monthly payment,” one said. Noah replied, "Finance 12K.” “18k car, 2,500 down, cosigned with 730+ credit, what will my monthly payment look like pls,” another inquired. Noah replied, “$345 ish.” One person disagreed that his formula is an accurate prediction of monthly car payments. “You are definitely WRONG!!! JM Lexus treated me good for my Lexus RX 350 .. 2024 .. Payment is lesser than what you quoted on your video,” they wrote. Noah replied, “You probably have good credit and got a special interest rate; this is assuming standard interest rates, which are 6-9%.” “Yes .. special interest rate is 5.75,” they confirmed. How Are Car Payments Determined? There are many factors that go into determining monthly loan payments. According to Achieve Financial Credit Union, there are five things that affect your car payment. Principal: The amount of money that is borrowed to purchase the car. For instance, if a car is $20,000, and you put down $5,000, the principal will be $15,000. Interest: This is a percentage you will pay for borrowing money from the lender. This interest rate will be determined by your credit score, loan term agreement, and current market conditions. Loan Term: Typically loan terms will range from 36 months to 72 months. The longer the loan term agreement, the lower the monthly payments will be. However, you will pay more interest over the life of a loan with a longer term. Taxes and Fees: This will be put towards the principle and not itemized separately. Registration fees, taxes, and any other up front costs will be considered when determining the monthly payment. Add ons: This includes any extended warranties, gap insurance, or any other additional products selected when buying the car. This will raise the principle which will impact the monthly payment. By knowing how each component factors into determining your monthly payment, buyers can better understand what price actually fits their budget. In addition to the rule Noah suggested, you can use online auto loan calculators from BankRate, Kelley Blue Book, or Calculator. But if you want a simple way to predict how much your payments may be and have good credit, Noah’s rule of thumb may suffice. “Use this rule when shopping for cars. Don’t walk into the dealership and crap your pants at payments. It’s just simple math,” he says. Motor1 has contacted Noah via TikTok direct message and submitted an online submission form with McGrath Lexus of Chicago, where he purportedly works. This story will be updated if he replies. We want your opinion! What would you like to see on Motor1.com? Take our 3 minute survey. - The Motor1.com Team
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