Auto Loan Calculator
Plan your car purchase with accurate payment estimates including sales tax and trade-in value.
Auto Loan Summary
What is an Auto Loan Calculator?
An auto loan calculator helps car buyers estimate their monthly payments and the total cost of financing a vehicle. It accounts for the vehicle price, down payment, trade-in value, sales tax, interest rate, and loan term.
Knowing the full cost of ownership before you visit a dealership lets you negotiate confidently and avoid overextending your budget. Unsure how much car fits your budget? Start with the Car Affordability Calculator.
How to Use
- Enter the vehicle price and your planned down payment.
- Add any trade-in value and the local sales tax rate.
- Set the interest rate and loan term using the slider (12 to 84 months).
- Click Calculate to see your loan amount, monthly payment, and total cost.
The Auto Loan Payment Formula
Auto loans are fixed-rate installment loans, so the payment comes from the standard amortization formula — the same math behind mortgages and personal loans:
M = P × r(1 + r)ⁿ / ((1 + r)ⁿ − 1)
- M — the monthly payment.
- P — the principal, meaning the amount actually financed: vehicle price minus down payment and trade-in, plus sales tax.
- r — the monthly interest rate: the annual percentage rate divided by 12. A 7% APR becomes 0.07 ÷ 12 ≈ 0.005833.
- n — the total number of monthly payments. A 5-year loan has 60 payments.
The total interest is M × n − P. Because the balance is highest at the start, interest dominates the early payments; the Amortization Calculator shows that shift payment by payment.
Worked Example: $35,000 Car with $5,000 Down
You buy a $35,000 car, put $5,000 down, and finance at 7% APR for 60 months with no trade-in and, for now, no sales tax. Then P = 35,000 − 5,000 = $30,000, r = 0.07 ÷ 12 ≈ 0.005833, and n = 60:
M = 30,000 × 0.005833(1.005833)⁶⁰ / ((1.005833)⁶⁰ − 1) = $594.04
Your monthly payment is $594.04. Over the 60 months your payments total $35,642.16, so the loan costs $5,642.16 in interest. Add your down payment back in and the total cost of owning the car is $5,000 + $35,642.16 = $40,642.16.
With a 6% sales tax, the $30,000 net price becomes $31,800 financed, the payment rises to $629.68, and total interest climbs to $5,980.69.
Monthly Payment per $10,000 Financed
Find your rate and term, then multiply by how many $10,000 units you finance. A $25,000 loan at 7% for 60 months, for example, costs about 2.5 × $198.01 ≈ $495 per month.
| Rate (APR) | 36 Months | 48 Months | 60 Months | 72 Months |
|---|---|---|---|---|
| 5% | $299.71 | $230.29 | $188.71 | $161.05 |
| 6% | $304.22 | $234.85 | $193.33 | $165.73 |
| 7% | $308.77 | $239.46 | $198.01 | $170.49 |
| 8% | $313.36 | $244.13 | $202.76 | $175.33 |
| 9% | $318.00 | $248.85 | $207.58 | $180.26 |
Choosing a Term: Lower Payment vs. Less Interest
A longer term lowers the payment but raises total interest. Here is the trade-off on a $30,000 loan at 7% APR:
| Term | Monthly Payment | Total Interest | Total Repaid |
|---|---|---|---|
| 36 months | $926.31 | $3,347.26 | $33,347.26 |
| 48 months | $718.39 | $4,482.59 | $34,482.59 |
| 60 months | $594.04 | $5,642.16 | $35,642.16 |
| 72 months | $511.47 | $6,825.85 | $36,825.85 |
| 84 months | $452.78 | $8,033.55 | $38,033.55 |
Moving from 60 to 84 months saves $141.26 a month but costs an extra $2,391.39 in interest, and long terms keep you upside down longer because cars depreciate quickly. Most advisors suggest 60 months or less.
Sales Tax and Fees
The financed amount is the vehicle price minus your down payment and trade-in, multiplied by one plus the sales tax rate, so the tax is rolled into the loan. Registration, title, and dealer fees are not included; add them to the vehicle price if you plan to finance them. To compare quotes that bundle fees differently, convert each to a true annual rate with the APR Calculator.
Down Payment and Trade-In
Every dollar down or received for your trade-in is a dollar you neither borrow nor pay interest on. At 7% APR for 60 months, each $1,000 less you finance lowers the payment by about $19.80 and saves roughly $188 in interest. A substantial down payment also protects against negative equity — new cars can lose 20% of their value in the first year — and lenders often reward it with a better rate.
New vs. Used Car Rates
Used-car loans typically carry rates one to several percentage points higher than new-car loans. As of 2026, well-qualified buyers often see new-car rates around 5–7% and used-car rates one to two points higher; weaker credit can mean 10% or more. Promotional rates such as 0% or 1.9% APR usually apply only to new cars — compare one against a cash rebate with the Cash Back or Low Interest Calculator.
Paying Off an Auto Loan Early
Most auto loans are simple-interest loans with no prepayment penalty, so extra dollars applied to principal shorten the loan and cut total interest. On the $30,000, 7%, 60-month example above, adding $100 to each payment pays the car off in about 50 months and saves roughly $972 in interest. Confirm that extra money goes toward principal and check for any prepayment penalty.
Frequently Asked Questions
How is the loan amount calculated?
The loan amount equals the vehicle price minus down payment and trade-in value, multiplied by one plus the sales tax rate. This ensures tax is financed only on the net amount you actually pay.
What is a good interest rate for a car loan?
As of 2026, rates vary widely based on credit score. Prime borrowers may see rates around 5-7%, while subprime borrowers may face 10% or higher.
Should I choose a longer loan term?
Longer terms lower your monthly payment but increase total interest paid. Try to keep the term at 60 months or less to avoid being upside down on your loan.
Does the calculator include registration and fees?
No, registration, title, and dealer fees are not included. Add those to the vehicle price if you plan to finance them.
How much does a down payment lower my monthly payment?
At 7% APR for 60 months, every $1,000 you put down lowers the monthly payment by about $19.80 and saves roughly $188 in interest over the life of the loan. In this calculator the down payment also shrinks the amount sales tax is applied to before financing.
Is it better to lease or finance a car?
Financing costs more per month but you own the car once the loan is repaid; leasing offers lower payments in exchange for mileage limits and no ownership. If you want a new car every few years, compare offers with our Auto Lease Calculator.
Can I pay off my car loan early?
Usually yes. Most auto loans charge simple interest with no prepayment penalty, so extra payments toward principal shorten the term and cut total interest. Adding $100 a month to a $30,000 loan at 7% for 60 months pays it off about 10 months early and saves roughly $972. Confirm that extra money goes toward principal.