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Car Loan Calculator

Use this car loan calculator to estimate your monthly auto payment, total interest, and the full cost of financing a vehicle. Factor in your down payment, trade-in value, and sales tax to get a complete picture before you visit the dealership.

The purchase price of the vehicle before taxes and fees.

The cash amount you will pay upfront to reduce the loan amount.

The value of your current vehicle if you are trading it in. This reduces the amount you need to finance.

The annual interest rate offered by your lender. Rates vary based on credit score, loan term, and whether the vehicle is new or used.

The length of the loan in months. Common terms are 36, 48, 60, and 72 months.

The sales tax rate in your state or locality applied to the vehicle purchase. Some states apply tax after trade-in deduction.

This calculator helps you estimate how much your car loan will cost each month and over the full loan term. It accounts for the vehicle price, down payment, trade-in value, sales tax, interest rate, and loan term so you can compare different financing scenarios and negotiate from an informed position.

How It Works

Auto Loan Payment Formula

Tax = (Vehicle Price - Trade-In) x Tax Rate; Loan Amount = Vehicle Price + Tax - Down Payment - Trade-In; M = Loan x [r(1+r)^n] / [(1+r)^n - 1]

Sales tax is calculated on the net vehicle price after trade-in. The loan amount is the vehicle price plus tax minus your down payment and trade-in value. Monthly payment is then calculated using the standard amortization formula.

Sales tax is applied to the vehicle price minus the trade-in value, since many states tax only the price difference.

The loan amount equals the vehicle price plus sales tax, minus the down payment and trade-in value.

M is the monthly payment calculated using the amortization formula.

r is the monthly interest rate (annual rate divided by 12).

n is the total number of monthly payments (the loan term in months).

Important Notes:

  • •This calculator assumes a fixed interest rate for the entire loan term.
  • •Sales tax is calculated on the vehicle price minus trade-in value, which reflects the practice in most US states. Some states tax the full vehicle price regardless of trade-in.
  • •The calculation does not include dealer fees, documentation fees, registration, or extended warranty costs.
  • •Interest is calculated using the standard amortization formula for fixed-rate installment loans.

Worked Example

A buyer purchases a $35,000 vehicle with a $5,000 down payment, no trade-in, 6.5% APR, a 60-month term, and 7% sales tax.

Inputs:

  • vehicle Price:35,000
  • down Payment:5,000
  • trade In Value:0
  • annual Interest Rate:6.5
  • loan Term Months:60
  • sales Tax Rate:7

Result:

The sales tax would be $2,450. The loan amount would be $32,450. The monthly payment would be approximately $634.73. Total interest paid over 60 months would be about $5,634, making the total cost of the vehicle approximately $43,084 including the down payment, all payments, and interest.

Who Is This Calculator For?

  • car buyers
  • auto shoppers
  • people comparing vehicle financing options
  • used car buyers

Frequently Asked Questions

Interest rates vary based on credit score, loan term, and whether the car is new or used. As of 2025-2026, competitive rates for new cars range from about 4% to 7% for borrowers with good credit. Used car rates are typically 1-2 percentage points higher. Check rates from multiple lenders including banks, credit unions, and the dealership.
A common recommendation is at least 20% of the purchase price for a new car and 10% for a used car. A larger down payment reduces your loan amount, monthly payment, total interest, and the risk of owing more than the car is worth.
Longer loan terms lower your monthly payment but increase the total interest paid and the risk of negative equity, where you owe more than the car is worth. If you need a 72-month term to afford the monthly payment, consider a less expensive vehicle instead.
In most US states, sales tax is calculated on the difference between the new vehicle price and your trade-in value. This means a higher trade-in value reduces your tax liability. However, some states tax the full purchase price regardless of trade-in.
Get pre-approved with your bank or credit union before visiting the dealership so you have a baseline rate to compare. Dealers sometimes offer competitive rates, especially manufacturer-backed promotional financing, but they may also mark up the rate. Having your own pre-approval gives you negotiating leverage.
This calculator does not include dealer documentation fees, title and registration fees, extended warranties, gap insurance, or other add-ons. These can add hundreds to thousands of dollars to your total cost, so ask the dealer for a full out-the-door price.

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Last updated: April 11, 2026