Auto Loan Calculator

How your car payment is calculated

Amount financed = price − down payment − trade-in + sales tax + fees Payment = L × r ÷ (1 − (1 + r)^−n)

L is the amount financed, r is the APR ÷ 12 and n is the number of months. In most US states sales tax is charged on the price after the trade-in is subtracted, which is how this calculator works.

Worked example

A $35,000 car with $5,000 down, 7% sales tax ($2,450) and $500 of fees means financing $32,950. At 6.9% for 60 months the payment is $650.90 a month, and you pay $6,104 in interest.

Shorter vs longer loans

Stretching a loan to 72 or 84 months lowers the payment but adds interest, and you may owe more than the car is worth for longer. A larger down payment or a shorter term keeps total cost down.

Estimates only. Your lender sets the final rate, fees and tax treatment, which vary by state and credit history.

Frequently asked questions

How much car can I afford?

A common guideline is to keep total car costs, including insurance and fuel, under about 15% of take-home pay. Try different prices above to see the payment.

Is sales tax included in the loan?

Usually, yes. Most buyers roll sales tax and fees into the amount financed, which this calculator assumes.

Does a trade-in reduce sales tax?

In most states, yes. Tax is charged on the price minus the trade-in value, though a few states tax the full price.

What is a good auto loan term?

Many experts suggest 60 months or less. Longer terms mean more interest and a higher chance of owing more than the car is worth.