Auto Loan Calculator
Calculate the true monthly cost of a car including trade-in and taxes.
Frequently Calculated Auto Loans
How to Use
Enter the vehicle price
Input the negotiated car price or MSRP sticker price before discounts.
Enter down payment and trade-in
Include any cash down payment and the estimated trade-in value of your current vehicle.
Set the interest rate and loan term
Input your approved APR and choose term length (36, 48, 60, 72, or 84 months).
Review total cost breakdown
View monthly payment, total interest, and complete cost over the loan life.
True Cost of a Car
When buying a car, the sticker price isn't the final number. Trade-in values and down payments lower your principal, but sales tax and interest inflate it. This specific calculator handles all those variables distinctively compared to a standard home loan.
Why are auto loan terms getting longer?
Dealerships often push 72-month or 84-month loans to make the monthly payment look smaller to the buyer. However, cars are depreciating assets. A longer term means you will be "underwater" (owing more than the car is worth) for a significant portion of the loan, while paying thousands more in interest.
Frequently Asked Questions
Should I choose a 60 or 72-month loan term?
While a 72-month auto loan reduces your monthly payment, you will pay significantly more in total interest. Shorter loan terms generally offer lower interest rates and prevent you from owing more than the car is worth.
How does tax impact my car purchase?
Depending on your location, sales tax is applied to the final purchase price of the vehicle. However, in many jurisdictions, if you trade in a vehicle, the tax is only calculated on the difference between the new car price and the trade-in value.
Real-World Examples & Use Cases
New Car Budget Planning
Prospective car buyers should calculate the monthly payment BEFORE visiting the dealership to set a firm budget ceiling. Entering the target monthly payment and working backward (using different price points and terms) reveals the maximum car price you can afford. Knowing the true cost including interest prevents dealers from manipulating the transaction by focusing solely on monthly payments rather than the total transaction price and interest charges over the full loan term.
Trade-In Value Analysis
Trading in your current vehicle reduces the loan amount needed, potentially reducing both monthly payment and total interest. However, some dealers offer inflated trade-in values while marking up the new car price equally. Running the auto loan calculator with and without the trade-in, comparing against selling privately, reveals the true net value of dealer trade-in versus private sale. In most US states, trade-in credit also reduces the taxable sale amount, providing additional savings through avoided sales tax.
Loan Term Comparison
Auto loan terms increasingly stretch to 72 and 84 months as vehicle prices rise. A $35,000 car at 6% APR: 48 months = $822/month, $4,458 total interest; 72 months = $580/month, $6,797 total interest. The 72-month option saves $242/month but costs an extra $2,339 over the loan life. Adding 6+ years of depreciation risk (engine repairs, accident, etc.) makes the longer term substantially more expensive in real terms when all factors are considered.
Used Car vs New Car Analysis
Used cars typically carry higher auto loan interest rates (0.5-2% more) than new cars but have lower purchase prices. A new $28,000 car at 4.9% APR for 60 months = $528/month; $31,680 total cost. A comparable used $19,000 car at 6.4% APR for 60 months = $370/month; $22,200 total cost. The $9,480 total savings from buying used dramatically exceeds the higher interest rate cost. The auto loan calculator lets you make this comparison objectively with your specific numbers.
How It Works
Auto loan payments use the same amortization formula as mortgages: Monthly Payment (PMT): PMT = P × [r(1+r)^n] / [(1+r)^n - 1] Where: - P = Loan principal (car price - down payment - trade-in + sales tax) - r = Monthly interest rate (annual APR ÷ 12) - n = Total months (loan term × 12) Loan Principal = Car Price - Down Payment - Trade-In Value + Sales Tax Sales Tax typically applies to: Car Price - Trade-In (in most US states) Example: $30,000 car, $3,000 down, $5,000 trade-in, 7% APR, no sales tax: - Principal = 30,000 - 3,000 - 5,000 = $22,000 - Monthly payment at 7% / 60 months ≈ $436 - Total paid = $26,160; Total interest = $4,160
Frequently Asked Questions
What credit score do I need for a good auto loan rate?▼
Should I make a large down payment on a car?▼
What is negative equity on a car loan?▼
Should I use dealer financing or my own bank?▼
How does a trade-in affect my car loan?▼
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