Auto Loan Calculator
Estimate a car loan's monthly payment from vehicle price, down payment, trade-in, sales tax, APR and term — with total interest and the true cost of the car.
Monthly payment
$690.31
60 payments · $34,450 financed
Amount financed
$34,450
Sales tax
$2,450
7% on $35,000
Total interest
$6,968
17% of payments
Total cost of car
$44,418
down + payments
Principal vs interest
Estimates only. Sales tax rules vary by state — many tax the price after the trade-in credit, a few tax the full price. Dealer fees, registration, extended warranties and gap insurance are not included. Confirm the APR and out-the-door price with the lender before signing.
How a car loan payment is worked out
A car loan is a fixed-rate installment loan: the monthly payment is set so the amount financed, plus interest, is fully repaid over the term. The amount financed is the vehicle price, plus sales tax and any dealer fees you roll in, minus your cash down payment and the net value of a trade-in. If you still owe money on the trade-in, that balance gets added back — "negative equity" that increases the new loan.
Term length is the biggest lever on the monthly number. Stretching a loan from 60 to 72 or 84 months lowers the payment but raises total interest and keeps you "underwater" — owing more than the car is worth — for longer, because vehicles depreciate faster than the balance falls in the early years. A larger down payment (or a real trade-in) shrinks the loan directly and reduces both the payment and total interest.
Sales tax handling varies by state. Most states tax the price after subtracting the trade-in credit, which is why a trade-in can save more than its sticker value suggests; a few tax the full purchase price. This calculator uses the after-trade-in method and lets you set the rate. It does not include title, registration, documentation fees, extended warranties, or gap insurance — add those separately when comparing an "out-the-door" price.
APR vs. the advertised rate: dealers sometimes quote a low rate that assumes a specific lender, a strong credit tier, or add-on purchases. The APR reflects the all-in yearly cost. Get pre-approved by your own bank or credit union first so you have a real number to negotiate against, and compare the total cost of financing, not just the monthly payment.
Key formulas (reference)
Monthly payment: M = P × [ r(1+r)^n ] / [ (1+r)^n − 1 ] P = amount financed = price + sales tax + fees − down payment − (trade-in − amount still owed) r = APR ÷ 12 n = loan term in months Sales tax (typical) = (price − trade-in value) × tax rate.
Related tools
These free tools pair well with this page — open them in a new tab to finish your workflow.
Frequently Asked Questions
How is the car loan payment calculated?
It uses the standard amortization formula: M = P × r(1+r)^n / ((1+r)^n − 1), where P is the amount financed, r is the APR divided by 12, and n is the term in months. The amount financed is the price plus sales tax and any rolled-in fees, minus your down payment and net trade-in value.
Does a trade-in reduce sales tax?
In most US states, yes — sales tax is applied to the price after subtracting the trade-in credit, so a $5,000 trade-in at a 7% rate saves about $350 in tax on top of reducing the loan. A few states tax the full purchase price regardless of trade-in. This calculator uses the after-trade-in method.
Is a longer loan term a good idea?
A 72- or 84-month loan lowers the monthly payment but increases total interest and keeps you owing more than the car is worth for longer, because cars depreciate faster than the balance falls early on. If you need a long term to afford the payment, the car may be more than the budget supports.
What is negative equity?
If you still owe more on your trade-in than it's worth, that gap is added to the new loan. You're then financing part of the old car plus the whole new one, which raises the payment and deepens how 'underwater' you are. Paying down the old loan first, or adding cash, avoids rolling it in.
Should I get pre-approved before visiting a dealer?
Yes. A pre-approval from your bank or credit union gives you a real APR to compare against the dealer's financing offer, and lets you negotiate the car price separately from the loan. Dealer-advertised rates often assume top-tier credit or add-on purchases.
What costs aren't included here?
Title, registration, documentation ('doc') fees, extended warranties, and gap insurance are not in this estimate. Ask for the full 'out-the-door' price and compare the total cost of financing across offers, not just the monthly payment.