How do I calculate a car payment?

Monthly payment = P × [r(1+r)^n] ÷ [(1+r)^n − 1], where P is the amount financed (vehicle price minus down payment and trade-in, plus sales tax), r is your monthly interest rate (APR ÷ 12), and n is the loan term in months. This calculator runs that formula instantly for any price, rate, and term.

Is sales tax calculated on the full price or after my trade-in?

In most US states, sales tax on a vehicle purchase is calculated on the price minus your trade-in value, not the full purchase price — this is often called a 'trade-in tax credit.' A few states tax the full price regardless of trade-in. Check your state's specific rule, since it meaningfully changes the tax amount on a trade-in deal.

Should I roll sales tax into my loan or pay it upfront?

Rolling tax into the loan (the default assumption here) means you finance it and pay interest on it over the loan term, increasing your total cost slightly. Paying it upfront at signing avoids that extra interest but requires more cash at purchase. This calculator assumes tax is financed; to model paying it upfront instead, simply increase your down payment by the tax amount.

How does a trade-in affect my monthly payment?

A trade-in reduces both the taxable amount (in most states) and the amount financed, directly lowering your monthly payment and total interest — functioning very similarly to an additional down payment, except it comes from your old vehicle's value instead of cash.

What's a good interest rate for an auto loan?

Auto loan rates vary by credit score, loan term, new vs. used vehicle, and lender — shorter terms and stronger credit typically get lower rates. There's no single 'good' rate at all times; check current average rates and your own pre-approval offers, then enter your actual quoted APR into the calculator.

Is a 72-month or 84-month loan term a good idea?

Longer terms lower your monthly payment but significantly increase total interest paid and extend how long you owe more than the car is worth (being 'underwater'), since cars depreciate faster than a long loan pays down principal. A shorter term costs more per month but builds equity faster and reduces total interest.

How much of my first payment goes to interest vs. principal?

Early payments on any amortizing loan are weighted more toward interest, since interest is calculated on the full remaining balance each month. As the balance shrinks over the loan term, later payments shift toward paying down more principal for the same fixed payment amount.

Does this calculator include registration fees or other costs?

No. It covers the vehicle price, down payment, trade-in, sales tax, and loan interest — not separate one-time costs like title, registration, or documentation fees, which vary by state and dealer and are typically paid upfront rather than financed.

Can I use this for a used car loan?

Yes. The loan math is identical for new and used vehicles — just enter the actual purchase price and your quoted interest rate, keeping in mind used car loan rates are often somewhat higher than new car rates.

How much car can I afford?

A common rule of thumb is to keep your total monthly car payment under 10-15% of your take-home pay, with total transportation costs (payment, insurance, gas, maintenance) under 20%. Many lenders also use a 20/4/10 guideline: 20% down, a loan term of 4 years or less, and total transportation costs under 10% of gross income. Use this calculator to test different prices and down payments against your budget before you shop.

Is my data stored anywhere?

No. All calculations run locally in your browser. Nothing you enter is transmitted to a server or stored.

Auto Loan Calculator

Calculate your monthly car payment, total interest, and total cost from a vehicle price, down payment, trade-in, sales tax, rate, and loan term.

Last updated July 31, 2026

Vehicle price ($)

Down payment ($)

Trade-in value ($)

Sales tax (%, optional)

Interest rate (APR, annual %)

Loan term

Monthly payment

$574.84/mo

Amount financed: $29,100

Sales tax

$2,100

Total interest paid

$5,391

Total loan cost

$34,491

Total out-of-pocket

$37,491

Amortization at a glance — first payment

$407.52 principal+ $167.33 interest

How to use the auto loan calculator

1
Enter the vehicle price, down payment, and trade-in value.
2
Add your local sales tax percentage, if any, and your quoted interest rate (APR).
3
Pick a loan term (36, 48, 60, or 72 months, or a custom term).
4
Your monthly payment, total interest, and total cost update instantly as you type.

How your car payment is calculated

The vehicle price, minus down payment and trade-in, plus sales tax, is the amount actually financed by the loan.

Step 1 — find the amount financed: vehicle price − down payment − trade-in value + sales tax (calculated on price minus trade-in, in most states).

Step 2 — apply the standard loan payment formula: M = P × [r(1+r)^n] ÷ [(1+r)^n − 1], where P is the amount financed, r is your monthly rate (APR ÷ 12), and n is the loan term in months.

Worked example: a $35,000 vehicle with a $3,000 down payment and a $5,000 trade-in, 7% sales tax, at 6.9% APR over 60 months. Taxable amount = $35,000 − $5,000 = $30,000, so sales tax = $2,100. Amount financed = $35,000 − $3,000 − $5,000 + $2,100 = $29,100. Plugging into the payment formula gives a monthly payment of $574.84, totaling $34,490.58 over 60 months — of which $5,390.58 is interest.

How loan term changes your total cost

Term (on $24,000 at 5.5%)	Monthly payment	Total interest paid
36 months	$724.70	$2,089.26
48 months	$558.16	$2,791.46
60 months	$458.43	$3,505.67
72 months	$392.11	$4,231.87

Stretching the same $24,000 loan from 36 to 72 months cuts the monthly payment by nearly half, but almost doubles (about 2x) the total interest paid — and keeps you financing a depreciating asset for twice as long.

Tips for getting a better car loan

Get pre-approved before you shop. A pre-approval from your bank or credit union gives you a real interest rate to compare against dealer financing, and often improves your negotiating position on the vehicle price itself.

Compare the shortest term you can comfortably afford. As the table above shows, a shorter term dramatically reduces total interest, even though the monthly payment is higher — run a few terms through the calculator to find the payment that fits your budget without stretching unnecessarily long.

Know your trade-in's value before you negotiate. Checking an independent valuation before visiting a dealer helps you evaluate whether a trade-in offer is fair, separately from any discount on the new vehicle's price.

Watch the total cost, not just the monthly payment. Dealers sometimes extend the loan term to hit a target monthly payment — always check the total interest and total cost figures here, not just whether the monthly number "feels" affordable.

Not sure buying beats leasing yet? Our Car Lease vs. Buy Calculator → compares the net cost of both over your ownership period.

Shopping for a home loan instead of a car loan? Try the Mortgage & Loan Calculator →

Frequently asked questions

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