Auto Loan Calculator

The calculator first works out how much you will actually borrow. Sales tax is applied to the vehicle price minus your trade-in, because most states only tax the difference. Fees are added, and your cash down and trade-in value are subtracted. The result is the amount financed. That amount is then amortized with the standard loan formula over the number of months you choose, giving a fixed monthly payment.

Total interest is simply the sum of all payments minus the amount financed. It is the clearest measure of what the loan costs you, and it rises quickly with both the rate and the term. Stretching a loan from 60 to 84 months lowers the payment but often adds thousands in interest and increases the chance you will owe more than the car is worth for years.

Get pre-approved by a bank or credit union before shopping so you have a rate to compare against dealer financing. Negotiate the out-the-door price of the car first, separately from the trade-in and financing, so a lower payment is not hiding a higher price. Aim to put at least 10–20% down to avoid being underwater, and keep the term as short as your budget allows. A popular rule of thumb is 20/4/10: 20% down, no more than four years, and total car costs under 10% of gross income.

Remember that the payment is only part of owning a car. Insurance, fuel, maintenance and depreciation often add as much again. If the payment fits only by stretching the term, consider a less expensive vehicle.

A $35,000 car with $5,000 down, no trade-in, 7% sales tax and $500 in fees: sales tax is $2,450, so the amount financed is 35,000 + 2,450 + 500 − 5,000 = $32,950. At 7% APR for 60 months, the monthly payment is about $652. Over five years you pay about $39,150 in total, of which roughly $6,200 is interest. Stretching the same loan to 72 months drops the payment to about $562 but raises interest to roughly $7,500.