How to use the Car Loan Calculator
- 1 Enter the car price, your down payment and any trade-in value.
- 2 Enter your state's sales tax rate and the loan's APR.
- 3 Choose the loan term from 36 to 84 months.
- 4 Read the monthly payment, the amount financed and the total interest you will pay.
Worked example
$35,000 car, $5,000 down, 7% tax, 7.5% APR for 60 months. Sales tax is $35,000 × 7% = $2,450, so the amount financed is $35,000 + $2,450 − $5,000 = $32,450. The monthly payment is about $650.23, and total interest over 60 months is about $6,564.
Features
Tax and trade-in included
Sales tax is added and the trade-in and down payment are taken off, giving the real amount you borrow.
Any term
Compare 36, 48, 60, 72 and 84-month loans to see how a longer term lowers the payment but raises the interest.
Total cost
The total of all payments shows what the car really costs once interest is added.
When to use it
Comparing dealer offers
A low payment can hide a long term. Put both offers in and compare total interest, not just the monthly figure.
Setting a budget
Work backwards from a payment you can afford to find a sensible price and down payment.
Refinancing
Enter your remaining balance as the price with no tax to see whether a lower APR would save money.
Frequently asked questions
How is a car loan payment calculated?
With the standard amortization formula: amount financed × r ÷ (1 − (1 + r)^−n), where r is the APR divided by 12 and n the number of months.
Is sales tax charged on the trade-in?
In most states sales tax is charged on the price after the trade-in value is taken off, which is what this calculator does. A few states tax the full price, so check your state's rule.
Is a longer loan a good idea?
A 72 or 84-month loan lowers the payment but costs more interest, and you can owe more than the car is worth for longer. Shorter terms save money if you can afford the payment.
Does this include dealer fees?
No. Documentation, title and registration fees vary by state and dealer. Add them to the price if they are being financed.
What APR should I use?
Use a pre-approval quote from your bank or credit union. Rates depend on your credit score, the term and whether the car is new or used.
Should I get pre-approved before the dealer?
Yes, it helps. A pre-approval from a bank or credit union gives you a rate to compare against dealer financing, so you can choose the cheaper loan rather than the one offered first.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Reviewed by ToolsUnlocked Team · Last updated