How to use the Auto Loan calculator
- Enter your numbers. Fill in vehicle price, down payment, trade-in value, interest rate, loan term.
- Enter taxes & fees details. Fill in sales tax, title, registration & fees.
- Read your results. Results update instantly. The headline shows the monthly payment; the breakdown and table below show the details.
How the auto loan calculator works
The amount you finance is the vehicle price plus sales tax and fees, minus your down payment and trade-in. In most states, sales tax is charged on the price after subtracting your trade-in, which is how this calculator handles it. A few states (such as California, Hawaii, Michigan (partially) and Virginia) tax the full price, so check your state’s rules.
The formula
Sales tax = (Price − Trade-in) × tax rate
The monthly payment then uses the standard amortization formula.
where M is the monthly payment, P the amount borrowed, r the monthly interest rate (APR ÷ 12) and n the number of monthly payments. Each month, interest is charged on the remaining balance and the rest of the payment reduces principal, so early payments are mostly interest and later payments are mostly principal.
Tips for a lower car payment
- Get pre-approved by a bank or credit union before visiting the dealer, so you have a rate to beat.
- Shorter terms (36–60 months) cost far less interest than 72–84 month loans.
- Negotiate the vehicle price, not the monthly payment.
Worked example
With these inputs: vehicle price$35,000; down payment$5,000; interest rate (apr)6.9%; loan term60 months; sales tax6%; title, registration & fees$800.
The calculator gives a monthly payment of $649.91. Other results: amount financed$32,900, sales tax$2,100, total interest$6,094, total cost of car$43,994.
What your results mean
The amount financed is what you actually borrow after tax, fees, down payment and trade-in. The monthly payment and total interest come from that figure, so lowering the price or adding cash down saves money twice: once on principal and again on interest.
Tips
- Get a pre-approval from a credit union or bank before shopping.
- Keep the term at 60 months or less if you can; long loans risk owing more than the car is worth.
- Check whether your state taxes the price before or after the trade-in credit.
Frequently asked questions
What is a good interest rate on a car loan?
It depends on your credit score, whether the car is new or used, and the term. Rates for excellent credit are much lower than for fair or poor credit, so compare at least two lender quotes.
How much should I put down on a car?
A common guideline is 20% on a new car and 10% on a used one. That lowers the payment and helps you avoid negative equity.
How much car can I afford?
A common guideline is to keep total car costs (payment, insurance, fuel) under 15–20% of take-home pay and to finance for no more than 60 months.
Should I roll fees into the loan?
You can, but you’ll pay interest on them. Paying fees upfront saves money.
Is a 0% APR offer better than a rebate?
Compare both: calculate the payment with the rebate at your bank’s rate versus the full price at 0%. The lower total cost wins.
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