Auto Loan Calculator

Estimate only, not financial advice. This is standard loan math on the numbers you type. It is not a credit decision, not a tax opinion, and not an offer from a lender. Use the rate, term, tax, and fees from your own quote. The 7.5 percent rate and 6 percent tax already filled in are placeholders, not a market rate and not your state's tax.

How the payment is calculated

Sales tax is computed on the vehicle price minus the trade-in, then added to the amount financed. Tax = (price − trade-in) × tax percent ÷ 100. Loan amount = price − down payment − trade-in + tax. The down payment does not reduce the taxable base in this model. The trade-in does. If the loan amount is zero or negative, the page stops and says no loan is needed.

The monthly payment is the standard fixed-rate amortization payment. Let r be the annual rate divided by 12 and then by 100, and let n be the term in months. Payment = loan × (r × (1 + r)^n) ÷ ((1 + r)^n − 1). If the rate is zero, the payment is simply the loan divided by the number of months, and interest is zero. Total interest is payment × months − loan. The "total cost of vehicle" line is down payment + trade-in value + every monthly payment. That sum equals price + sales tax + interest when the loan is positive. It is the resources committed in this model, counting the trade-in at the value you typed.

Dollar outputs round to the nearest dollar. A real coupon book can differ by cents, and the last payment is sometimes adjusted by a dollar. The page does not print an amortization schedule. Early payments are mostly interest and later payments are mostly principal on any standard amortizing loan. This tool shows the level payment, the interest total, and the cost total, not each month's split.

Worked examples

Example 1: A five-year loan with tax rolled in

Price $35,000, down payment $5,000, trade-in $0, annual rate 7.5 percent, term 60 months, sales tax 6 percent. Tax = 35,000 × 0.06 = $2,100. Loan = 35,000 − 5,000 + 2,100 = $32,100. The monthly payment rounds to $643. Total interest rounds to $6,493. Total cost rounds to $43,593, which is the $5,000 down payment plus 60 payments. Replace 7.5 and 6 with the rate and tax on your quote before you treat any of those dollars as yours.

Example 2: The same loan on a shorter term

Keep every input from example 1 and change the term to 36 months. The payment rises to about $999 and total interest falls to about $3,846. You pay more each month and less interest over the life of the loan. The page does not tell you which term a lender will approve. It only shows the arithmetic. A longer term lowers the payment and raises the interest total. Run 48, 60, and 72 with your real rate if you want to see that tradeoff in your numbers.

Example 3: A trade-in

Same price and down payment, with a $4,000 trade-in, 7.5 percent, 60 months, 6 percent tax. Taxable base = 35,000 − 4,000 = $31,000. Tax = $1,860. Loan = 35,000 − 5,000 − 4,000 + 1,860 = $27,860. The payment falls because the loan is smaller, and the total-cost line still includes the $4,000 trade-in value, because that value left your hands as part of the deal. If your state taxes the transaction differently, this model will not match the contract. The contract's taxable amount wins.

Example 4: Paying tax at signing instead of financing it

This page always adds tax into the loan. If you will write a check for tax and do not want it financed, set the tax percent to 0 and add the tax into the cash you bring, mentally, outside the loan. Putting tax both in the tax field and inside a larger down payment double-counts it. Fees that are financed, such as a documentation fee you agreed to roll in, can be added to the vehicle price so they join the loan. Fees you pay in cash should stay out of the price.

When to use this

Use it before you sit down at a dealership, and again when the lender's worksheet arrives, to see whether the payment and the interest match the price, the cash, the trade, the rate, and the term you think you are signing. It is the right tool for comparing two terms or two down payments on the same car. It is the wrong tool for deciding whether the car is affordable in a full life budget. Insurance, fuel, maintenance, and registration are not in the payment.

Fuel for two candidate vehicles is the Fuel Economy Comparison. A home loan uses a different screen, with taxes and insurance in the monthly figure, on the Mortgage Payment Calculator. If the down payment is going on a credit card, the payoff of that card is a separate balance in the Credit Card Payoff Calculator, usually at a much higher rate than the auto loan.

What a longer term actually buys

A common budgeting heuristic says to put money down, keep the term short, and hold all transportation costs to a modest share of income. This page cannot test that heuristic. It does not know your income, your insurance quote, or your fuel bill. What it can show is the piece inside its formula: stretching the term lowers the monthly payment and increases total interest, as example 2 illustrates. A very long term also means you are still paying for the vehicle deep into its life, when repair costs tend to show up. The page does not model depreciation or the chance that you owe more than the car is worth. Those are reasons to look at the interest total and the term together, not reasons the calculator will flag for you.

The rate in the form is an annual percentage rate entered as a simple input to the monthly formula above. Your contract may quote a rate, an APR that includes certain finance charges, and a money factor if someone tries to steer you into a lease. This tool is a loan, not a lease. Type the interest rate that the amortization on the retail installment contract uses, and ask the lender which figure that is.

Common mistakes

• Leaving 7.5 percent and 6 percent in place. Those are starter values. A quote at a different rate or a state with a different tax produces a different payment. Type the quote.
• Assuming the down payment reduces sales tax. In this model, tax is on price minus trade-in. Down payment reduces the loan after tax is computed.
• Forgetting the trade-in is inside "total cost." The line adds the trade-in value back. It is not "cash out of pocket only."
• Rolling tax in and also paying it at the desk. Use the tax field only for tax that is financed. Set it to zero if you pay tax in cash.
• Comparing payments that hide different terms. A lower payment on 84 months can be the more expensive loan. Read total interest.
• Adding gap insurance, warranties, and doc fees after you calculated, then financing them anyway. If they are in the amount financed, they belong in the price you type.
• Using this payment as the whole cost of the car. Fuel, insurance, and repairs continue after the formula ends.

Limitations

Fixed rate, monthly payments, tax as a single percent of price minus trade-in, no fees unless you fold them into the price, no extra principal payments, and no credit-score lookup. A zero rate works. A negative rate does not represent a real contract and can produce a nonsense payment. Title, registration, dealer fees, gap cover, and service contracts are omitted unless you add them to the price. The total-interest figure assumes you pay the scheduled payment for the full term and never refinance. Rounding is to the nearest dollar. If the trade-in is larger than the price, tax goes negative in this model and shrinks the loan, which may not match your state's worksheet. Use the lender's truth-in-lending figures as the authority.

FAQ

Why is my lender's payment a few dollars different?

Cents, a fee rolled in, a tax base that is not "price minus trade-in," or a term counted in days can all move the payment. Match their amount financed and their rate and term. If you still disagree, their disclosure is the contract. This page is the estimate.

Does the payment include insurance?

No. The monthly figure is principal and interest on the loan amount defined above. Add your insurance quote yourself. The mortgage calculator on this site has a slot for insurance because mortgages often escrow it. This auto loan screen does not.

What happens if I pay extra each month?

The calculator does not model extra principal. Extra payments usually shorten the term and reduce interest on a simple-interest auto loan, if the lender applies them to principal. Confirm that with the lender. The interest total on this page assumes no extras.

Related calculators

• Mortgage Payment Calculator
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• Fuel Economy Comparison
• Percent Change Calculator to compare two payments as a percent
• How mortgage amortization actually works for the same style of payment math on a home loan