Car Loan Calculator
Auto payment including trade-in, down payment and sales tax.
Reviewed by the Calculation Machine team · Updated 24 October 2026 · How we check our maths
Your values
ⓘ Live results
- Monthly payment
- $605.24
- Amount financed
- $29,920.00
- Sales tax
- $1,920.00
- Total interest
- $6,394.33
- Total cost
- $40,314.33
Quick answer
A car loan payment is the standard amortized loan formula applied to the amount financed – price plus sales tax, minus down payment and trade-in. Monthly payment = P × r ÷ (1 − (1 + r)^−n), where r is the APR ÷ 12. Financing $29,920 at 7.9% APR for 60 months gives a payment of $605.24 and $6,394 in total interest.
What the Car Loan calculator does
This calculator works out the monthly payment on an auto loan, the amount financed, the sales tax, the total interest and the total cost of the car including interest. Enter the vehicle price, your cash down payment, any trade-in value, your state or local sales tax rate, the APR you have been offered and the loan term in months.
It assumes sales tax is charged on the full vehicle price and financed with the car. Many US states tax only the price minus your trade-in, which lowers the tax; if yours does, enter a reduced tax rate or subtract the tax saving from the price. Dealer documentation fees, registration, title and add-ons such as extended warranties are not included – add them to the price if you are rolling them into the loan.
Your APR depends mainly on your credit score, the loan term and whether the car is new or used. Getting a pre-approval from a bank or credit union before visiting a dealer gives you a rate to compare. To check how a payment fits your budget, use the debt-to-income calculator.
The formula
Amount financed P = price + (price × tax%) − down payment − trade-in Monthly payment M = P × r ÷ (1 − (1 + r)^−n) Total interest = M × n − P
| Symbol | Meaning | Unit |
|---|---|---|
| P | Amount financed (principal) | $ |
| r | Monthly interest rate = APR ÷ 100 ÷ 12 | per month |
| n | Loan term in months | months |
| M | Fixed monthly payment | $ |
This is the standard fixed-rate amortization formula used by US lenders for simple-interest auto loans, as described in the Consumer Financial Protection Bureau's guidance on auto loans. When the APR is 0%, the payment is simply P ÷ n. Precomputed-interest loans, which some buy-here-pay-here lenders use, front-load interest and are not modeled here.
Worked examples
New car with a trade-in
A $28,000 car with $3,000 down, a $6,000 trade-in, 7% sales tax, 6.5% APR over 60 months.
Inputs
- Vehicle price28000 $
- Down payment3000 $
- Trade-in value6000 $
- Sales tax7 %
- Interest rate6.5 %
- Term60 months
Result
- Monthly payment$410.11
- Amount financed$20,960.00
- Sales tax$1,960.00
- Total interest$3,646.39
- Total cost$33,606.39
About $410 a month and $3,646 in interest. If your state taxes only the $22,000 net of trade-in, tax drops by $420, trimming the payment by roughly $8.
No money down on a long term
A $45,000 SUV with nothing down, 8.25% sales tax and 9.5% APR stretched to 84 months.
Inputs
- Vehicle price45000 $
- Down payment0 $
- Trade-in value0 $
- Sales tax8.25 %
- Interest rate9.5 %
- Term84 months
Result
- Monthly payment$796.16
- Amount financed$48,712.50
- Sales tax$3,712.50
- Total interest$18,164.62
- Total cost$66,877.12
The payment is about $796, but interest totals over $18,000. With nothing down and a seven-year term, the loan balance is likely to exceed the car's value for several years – a risk if the car is totaled or sold early.
Used car with fair credit
An $18,000 used car with $2,000 down, 6% tax and a 12% APR over 48 months.
Inputs
- Vehicle price18000 $
- Down payment2000 $
- Trade-in value0 $
- Sales tax6 %
- Interest rate12 %
- Term48 months
Result
- Monthly payment$449.78
- Amount financed$17,080.00
- Sales tax$1,080.00
- Total interest$4,509.53
- Total cost$23,589.53
About $450 a month and $4,510 in interest. Improving the rate to 8% through a credit union would save a meaningful share of that – rerun with the rate you are offered.
How the loan term changes your cost
Longer terms lower the monthly payment but increase total interest, and lenders usually charge higher APRs on longer terms too. The table holds the rate at 7% to show the effect of term alone on $25,000 financed.
| Term | Monthly payment | Total interest |
|---|---|---|
| 36 months | $771.93 | $2,789 |
| 48 months | $598.66 | $3,735 |
| 60 months | $495.03 | $4,702 |
| 72 months | $426.23 | $5,688 |
| 84 months | $377.32 | $6,695 |
How much car can you afford
A widely used rule of thumb is 20/4/10: put at least 20% down, finance for no more than 4 years, and keep total car costs – payment, insurance and fuel – under about 10% of gross income. It is conservative, but it limits the chance of owing more than the car is worth.
New cars lose value fastest in the first few years, so a small down payment and long term can leave you "upside down" on the loan. The car depreciation calculator estimates the car's value over time; compare it with the loan balance from the amortization calculator. If you want a lower payment without owning the car, compare options with the lease vs buy calculator.
Dealer financing traps to watch
- Payment-focused selling: a dealer can hit any monthly target by stretching the term. Negotiate the vehicle price first, then the financing.
- Rate markups: dealers can add to the rate a lender approves you for. A pre-approval shows what you qualify for.
- 0% APR versus a cash rebate: manufacturers often offer one or the other. Run both – a rebate taken off the price with a bank loan can be cheaper than 0% financing.
- Rolled-in extras: extended warranties, GAP insurance and negative equity from a previous loan all increase the amount financed and the interest you pay.
How to use the Car Loan Calculator
- 1Enter the negotiated vehicle price before tax, adding any fees you will finance.
- 2Enter your cash down payment and the trade-in value the dealer is offering (subtract any payoff you still owe on the trade-in).
- 3Enter the sales tax rate for where you will register the car.
- 4Enter the APR from your loan offer and the term in months, then read the payment, total interest and total cost.
Frequently asked questions
How is a car payment calculated?
The lender applies the amortization formula to the amount financed, the monthly rate (APR ÷ 12) and the number of months. Each payment covers that month's interest first and the rest reduces the balance.
Is a 72- or 84-month car loan a good idea?
It lowers the payment but costs more in interest and usually carries a higher rate. On $25,000 at 7%, going from 60 to 84 months saves about $118 a month but adds nearly $2,000 in interest.
Does a trade-in reduce sales tax?
In many US states, yes – tax is charged on the price minus the trade-in value. Some states tax the full price. Check your state's motor vehicle or revenue department.
What if I still owe money on my trade-in?
Subtract the payoff from the trade-in value. If you owe more than the car is worth, that negative equity is usually added to the new loan; enter it as a negative trade-in value or add it to the price.
How much interest will I pay on a car loan?
Total interest is the monthly payment times the number of months, minus the amount financed. The calculator shows it directly; it rises with both the APR and the term.
References
- Auto loans – consumer guidance — Consumer Financial Protection Bureau
- Understanding Vehicle Financing — Federal Trade Commission
About this calculator
- Built and reviewed by the Calculation Machine team · How we build and test calculators
- Last reviewed: October 24, 2026
- Report an error