Car Loan Calculator

A car payment is built from more than the sticker price. Sales tax, dealer and registration fees, your down payment and your trade-in all change the amount you borrow, and the term and APR decide what that borrowing costs. This calculator puts those pieces together in the same order a dealer’s finance office does, so you can check a quote before you sign.

How to use the car loan calculator

1. Enter the vehicle price you have agreed, before tax.
2. Enter your down payment in cash and the trade-in value of your current car, after subtracting anything you still owe on it.
3. Enter your sales tax rate and choose whether it applies to the price minus the trade-in or to the full price.
4. Add any fees you are rolling into the loan, such as title, registration and documentation fees.
5. Enter the APR you have been offered and pick a term from 24 to 84 months.

The results show your monthly payment, the amount financed, the sales tax, the total interest and the total cost of the car including interest.

How the payment is calculated

First the calculator works out what you are borrowing:

Sales tax       = (Price − Trade-in) × tax rate      (or Price × tax rate)
Amount financed = Price + Sales tax + Fees − Down payment − Trade-in

Then it uses the standard amortization formula for a fixed-rate loan:

Payment = A × r ÷ (1 − (1 + r)^−n)

where A is the amount financed, r is the APR ÷ 12 and n is the number of months. Each payment covers that month’s interest first, and the rest reduces the balance. If the APR is 0%, the payment is simply A ÷ n.

Worked example

You agree a price of $32,000, put $4,000 down and trade in a car worth $6,000. Sales tax is 7% on the price minus the trade-in, and $800 of fees go into the loan. The lender offers 6.5% APR over 60 months.

• Sales tax = (32,000 − 6,000) × 7% = $1,820.00
• Amount financed = 32,000 + 1,820 + 800 − 4,000 − 6,000 = $24,620.00
• r = 0.065 ÷ 12 ≈ 0.0054167, n = 60
• Monthly payment = 24,620 × r ÷ (1 − (1 + r)^−60) ≈ $481.72
• Total interest = 481.72 × 60 − 24,620 ≈ $4,283.11
• Total cost of the car = 32,000 + 1,820 + 800 + 4,283.11 = $38,903.11

In the first month, $133.36 of the payment is interest and about $348 pays down the balance. By the last year almost all of each payment goes to the balance.

If your state taxed the full price instead, the tax would be $2,240 and the payment would rise to $489.94.

How the term changes the cost

The same $24,620 at 6.5% over different terms:

Term	Monthly payment	Total interest
36 months	$754.58	$2,544.82
48 months	$583.86	$3,405.38
60 months	$481.72	$4,283.11
72 months	$413.86	$5,177.95
84 months	$365.59	$6,089.82

Going from 60 to 84 months lowers the payment by $116 a month but costs $1,807 more in interest. In practice the gap is often larger, because lenders usually charge a higher APR on longer loans.

Tips for a cheaper car loan

• Get pre-approved first. A quote from your bank or credit union gives you a rate to beat, so the dealer has to compete for the loan.
• Negotiate the price, not the payment. A dealer can hit any monthly payment you name by stretching the term. Agree on the out-the-door price first, then talk about financing.
• Watch the rate as well as the term. On the example loan, 9% APR instead of 6.5% adds about $29 a month and $1,761 of interest over five years.
• Check what’s being added. Extended warranties, gap insurance and paint protection are often folded into the amount financed, where you pay interest on them too. Ask for an itemized buyer’s order.

Common mistakes

• Forgetting tax and fees. A $32,000 car rarely means a $32,000 loan. In the example, tax and fees add $2,620 before any interest.
• Ignoring negative equity. If you owe $8,000 on a car worth $6,000, the $2,000 shortfall usually ends up in the new loan.
• Comparing payments across different terms. A lower payment over a longer term is usually the more expensive loan. Compare the total interest instead.
• Treating the result as a quote. Lenders set your actual APR from your credit, the car’s age and the term, and some charge fees that this estimate leaves out.

Frequently asked questions

Is sales tax charged on the full price or after the trade-in?

In most US states sales tax applies to the price minus your trade-in, which can save you hundreds of dollars. A few states, including California, tax the full price. Pick the option that matches your state, or ask the dealer how they calculated it.

Should I choose a 72- or 84-month car loan?

Only if you can't afford the payment any other way. On a $24,620 loan at 6.5%, stretching from 60 to 84 months cuts the payment by about $116 but adds about $1,807 of interest, and you are more likely to owe more than the car is worth for years.

What if I still owe money on my trade-in?

Enter the trade-in value minus what you still owe. If you owe more than it's worth (negative equity), the difference is usually rolled into the new loan, so add it to the fees field instead.

Does a 0% APR deal mean the car costs nothing extra?

There is no interest, so the payment is just the amount financed divided by the months. But 0% offers often replace a cash rebate, so compare the 0% deal with the rebate plus a normal-rate loan.

What is the difference between APR and the interest rate?

APR includes some lender fees as well as interest, so it is the better number for comparing offers. This calculator uses the rate you enter as the annual rate and charges a twelfth of it each month.

Last updated October 29, 2026 · By the ZTool team