Auto Loan Calculator
Work out what a car will really cost each month and in total, including sales tax, your down payment and any trade-in.
How the auto loan calculator works
A car loan works like any fixed-rate installment loan. You borrow an amount, pay a fixed monthly payment, and each payment covers that month's interest plus a slice of the balance. The calculator first works out how much you need to borrow, then applies the standard payment formula:
Amount financed = price − trade-in + sales tax − down payment
Payment = L × r × (1 + r)ⁿ ÷ [(1 + r)ⁿ − 1]
Here L is the amount financed, r is the monthly rate (the APR divided by 12) and n is the number of months.
Example
A $35,000 car with $3,000 down and 6% sales tax ($2,100) means you finance $34,100. At 7% APR over 60 months the payment is about $675.22, and you pay roughly $6,413 in interest.
Choosing the loan term
A longer term lowers the monthly payment but raises the total interest. It also keeps you owing money for longer, and cars lose value quickly, so on a long loan you can owe more than the car is worth for a while. Compare 48, 60 and 72 months above to see the trade-off.
A common rule of thumb is the 20/4/10 guideline: put at least 20% down, finance for no more than four years, and keep total car costs, including insurance and fuel, under about 10% of your gross income. It is a starting point rather than a rule.
What is not included
Sales tax rules differ by state. This calculator applies the tax rate to the price minus your trade-in, which some states do and some do not. Title, registration and dealer fees, add-ons such as extended warranties, and insurance are not included. Ask the dealer for an out-the-door price and use that figure to get a closer result.
Estimates only. Your lender's actual terms depend on your credit, the vehicle and the loan offer.
Frequently asked questions
How is a car loan payment calculated?
From the amount you finance, the interest rate and the number of months, using the standard installment-loan formula shown above. Sales tax and fees can be rolled into the loan, which raises the amount financed.
Should I choose a 60-month or a 72-month car loan?
A 72-month loan has a lower payment but costs more in interest and leaves you owing for longer. If you can afford the 60-month payment comfortably, it usually costs less overall.
Does a bigger down payment help?
Yes. It reduces the amount you borrow, which lowers both the monthly payment and the total interest, and it helps you avoid owing more than the car is worth.