Auto Loan Calculator

How to Use This Car Loan Calculator

1. Enter the vehicle price.
2. Add your down payment and trade-in value, if any both reduce the amount you finance.
3. Enter your local sales tax rate. The calculator applies this to the vehicle price and adds it to your loan amount, since most buyers finance the tax rather than paying it upfront.
4. Enter the interest rate (APR) your lender quoted you.
5. Choose your loan term 36, 48, 60, and 72 months are the most common options.
6. Hit Calculate to see your monthly payment, loan amount, sales tax, total interest, and total cost.

Change any field and recalculate to compare scenarios, a 60-month term against a 72-month term, or a bigger down payment against a smaller one.

How to Calculate a Car Loan Payment

This calculator works in the same two steps you'd use to work out a monthly car payment by hand.

Step 1: Work out what you're actually financing:

Loan Amount = Vehicle Price − Down Payment − Trade-In Value + Sales Tax

Sales tax is calculated on the full vehicle price, then added to your loan amount. Most buyers finance the tax rather than pay it out of pocket at signing.

Step 2: Amortize that loan amount.

Using the standard installment loan formula. Every month you pay a mix of principal (what you borrowed) and interest (what it costs to borrow it) early payments lean more toward interest, and later ones lean more toward principal:

M = P × [r(1 + r)^n] / [(1 + r)^n − 1]

Where:

• M = monthly payment
• P = loan amount from Step 1
• r = monthly interest rate (your annual rate ÷ 12)
• n = number of monthly payments (loan term in months)

You don't need to run this by hand; that's what the calculator above is for, but it helps to know what's actually driving your number.

Example: Car Loan Calculator With Down Payment and Trade-In

Say you're financing a $28,000 car with a $3,000 down payment, no trade-in, an 8% sales tax rate, at 6.5% APR over 60 months.

• Sales tax (8% of $28,000): $2,240
• Loan amount ($28,000 − $3,000 + $2,240): $27,240
• Monthly payment: $532.98
• Total interest over 5 years: $4,738.91
• Total cost of the loan: $31,978.91

Small changes move this more than people expect. A trade-in or a bigger down payment lowers the loan amount directly, and stretching the same loan to 72 months usually lowers the monthly payment but increases total interest paid, since you're borrowing the money for longer.

What Affects Your Monthly Car Payment

• Loan term — a longer term means a lower monthly payment but more interest overall.
• Down payment — every dollar you put down is a dollar you're not paying interest on.
• Interest rate — even a 1–2% difference can add up to hundreds of dollars over the life of the loan, which is why it's worth comparing offers from more than one lender.
• Credit score — lenders price risk into the rate, so a stronger credit profile typically gets access to lower APRs.
• Trade-in value — reduces the amount financed the same way a down payment does.
• Sales tax — since it's calculated on the vehicle price and usually rolled into the loan, a higher local tax rate increases both your loan amount and your payment, even if the car's price doesn't change.

What Affects Your Monthly Car Payment

• Loan term — a longer term means a lower monthly payment but more interest overall.
• Down payment — every dollar you put down is a dollar you're not paying interest on.
• Interest rate — even a 1–2% difference can add up to hundreds of dollars over the life of the loan, which is why it's worth comparing offers from more than one lender.
• Credit score — lenders price risk into the rate, so a stronger credit profile typically gets access to lower APRs.
• Trade-in value — reduces the amount financed the same way a down payment does.
• Sales tax — since it's calculated on the vehicle price and usually rolled into the loan, a higher local tax rate increases both your loan amount and your payment, even if the car's price doesn't change.

Important Assumptions

This calculator estimates a standard fixed-rate, fixed-term amortized loan and includes sales tax in the financed amount. It doesn't automatically include registration fees, dealer add-ons, or GAP insurance, if your lender rolls those into the loan, add them to the vehicle price for a more accurate estimate. Sales tax rates vary by state and county, so use your local rate rather than a national average. Actual loan offers depend on your lender, credit profile, and local taxes, so treat the result as a planning estimate rather than a guaranteed quote.

Frequently Asked Questions