Auto Loan Calculator
It turns a sticker price into a real monthly car payment by folding in your down payment, trade-in, sales tax, dealer fees and interest rate.
Monthly car payment
$581.90
Amount financed
$29,740
Sales tax
$2,240
Total interest
$5,174
Total of payments
$34,914
Total cost
$42,914
Payments
60
What it calculates
It turns a sticker price into a real monthly car payment by folding in your down payment, trade-in, sales tax, dealer fees and interest rate.
Why it matters
Dealers negotiate on monthly payment, not total cost. Stretching a loan from 48 to 84 months lowers the payment and quietly adds thousands in interest.
Who it's for
Anyone shopping for a car, comparing dealer finance against a bank or credit union, or checking whether a deal is actually affordable.
Formula
- P
- Amount financed after down payment and trade-in
- t
- Sales tax, charged on price net of trade-in in most states
- r
- Monthly interest rate (APR ÷ 12)
- n
- Number of monthly payments
Worked example
$35,000 car, $5,000 down, $3,000 trade-in, 7% tax, 6.5% APR over 5 years
- 1Taxable amount = 35,000 − 3,000 = 32,000
- 2Sales tax = 32,000 × 7% = 2,240
- 3Financed = 35,000 − 5,000 − 3,000 + 2,240 + 500 fees = 29,740
- 4M = P · r(1+r)⁶⁰ / ((1+r)⁶⁰ − 1)
Monthly payment ≈ $581.90
How the auto loan calculator works
A car loan is an ordinary amortizing loan; the complication is everything bolted on before the loan starts. Most US states charge sales tax on the price after the trade-in is deducted, which is why a trade-in saves you more than its face value. Dealer fees are financed too, so they accrue interest for the whole term.
The loan is a standard amortizing loan; what makes a car different is everything added before it starts. Most US states charge sales tax on the price after the trade-in is deducted, so a trade-in is worth more than its face value.
Dealer fees are financed alongside the car, which means they accrue interest for the full term. Paying them up front is almost always cheaper.
Common mistakes
- Negotiating the monthly payment instead of the out-the-door price — the term can always be stretched to hit a number.
- Forgetting that tax and fees are financed, so you borrow more than the car costs.
- Rolling negative equity from an old loan into a new one, which compounds the problem.
Tips and best practice
- Get pre-approved by a bank or credit union first; it gives you a rate to beat.
- Compare 48, 60 and 72 months on total interest, not on monthly payment.
- A larger down payment protects you from going underwater as the car depreciates.
Frequently asked questions
Is sales tax charged before or after the trade-in?
In most US states the tax applies to the price after the trade-in is deducted, so a $3,000 trade-in at 7% tax saves $3,210 in total. A handful of states tax the full price — check your state's rule.
Does a longer car loan cost more?
Yes. The payment falls but you pay interest for more months, and you spend longer owing more than the car is worth because cars depreciate fastest early on.
Should I finance the dealer fees?
If you can pay them up front, do. Financed fees accrue interest across the whole term, so a $500 fee on a 6.5% six-year loan costs about $600.
What credit score do I need for a good auto rate?
Rates improve sharply above roughly 660 and again above 720. Below that, a larger down payment or a credit-union loan usually beats dealer finance.
What is negative equity?
Owing more on the loan than the car is worth. Rolling it into your next loan means borrowing against a car you no longer own.
Related calculators
Methodology & trust
- Formula source
- Standard amortizing loan formula with US sales-tax-on-trade-in convention.
- Last updated
- 2026-07-28
- Privacy
- Every calculation runs in your browser. No inputs are sent to a server or stored.
- Accessibility
- Keyboard navigable, labeled inputs and WCAG AA color contrast.