How to use this car payment calculator
- Enter the vehicle price you expect to pay after any discounts or rebates.
- Add dealer fees, such as documentation, title and registration charges, and your local sales tax rate.
- Enter your down payment, your trade-in value and any amount you still owe on the trade-in.
- Enter the APR from your loan offer and the loan term in months.
- Review the monthly payment, total interest and amortization table, then try other terms or down payments to compare.
How it's calculated
First, the calculator works out the amount financed: the vehicle price plus dealer fees and sales tax, minus your down payment and trade-in value, plus anything you still owe on the trade-in. Sales tax is applied to the price minus the trade-in value, because many US states tax only the difference. Rules vary, so confirm how your state or province handles it.
The monthly payment uses the standard loan formula: payment = P × r ÷ (1 − (1 + r)−n), where P is the amount financed, r is the APR divided by 12 and then by 100, and n is the number of months. At 0% APR, the payment is simply P ÷ n. Total of payments is the monthly payment times n, and total interest is that figure minus P.
Example: you buy a $32,000 car with $800 in fees and 7% sales tax, trade in a car worth $6,000 that still has $2,000 owing, and put $4,000 down. Tax is 7% of $26,000, or $1,820, so the out-the-door price is $34,620. The amount financed is $32,000 + $800 + $1,820 − $4,000 − $6,000 + $2,000 = $26,620. At 6.9% APR for 60 months, the payment is about $525.85, total payments come to $31,551.17 and total interest is $4,931.17. In the first year, roughly $1,693 of your payments goes to interest and $4,618 to principal.
Ways to pay less for your car loan
- Get preapproved by a bank or credit union before you shop, so you can tell whether the dealer's financing offer is actually better.
- Negotiate the vehicle price first, then discuss financing and your trade-in separately so one doesn't hide the cost of another.
- Compare loan terms by total interest, not just the monthly payment. Stretching from 60 to 72 or 84 months lowers the payment but usually costs more overall.
- Ask for an itemized list of fees and question add-ons you didn't request, such as paint protection or window etching.
- If you owe more on your trade-in than it's worth, rolling that balance into the new loan means paying interest on a car you no longer own.
Good to know: The APR you're offered depends heavily on your credit score, the loan term and whether the car is new or used. These results are estimates; your lender's disclosure shows the exact figures.
Frequently asked questions
Does a bigger down payment lower my car payment?
Yes. Every dollar you put down reduces the amount financed, so both the monthly payment and the total interest drop. A larger down payment also lowers the chance of owing more than the car is worth early in the loan.
Is sales tax charged on the full price when I trade in a car?
In many US states, sales tax applies only to the difference between the vehicle price and your trade-in value, which is how this calculator works. Some states and provinces tax the full price, so your actual tax may be higher than shown.
What happens if I owe more on my trade-in than it is worth?
The shortfall, called negative equity, is added to your new loan. You pay interest on it, so it raises your payment. Paying down the old loan first or waiting until you have equity usually saves money.