🚗 Auto Loan Calculator
Work out your real monthly car payment before you're sitting at the dealership — including sales tax, your trade-in and down payment — so the numbers can't be padded on you.
What actually drives your car payment
Four numbers decide your monthly payment: the amount financed, the APR, the term, and sales tax. The amount financed is the vehicle price, plus sales tax, minus your down payment and trade-in. That total is amortized over the term using the same formula as any other fixed loan.
The trap of the long term
Dealers love to negotiate on the monthly payment rather than the price, because stretching a loan to 72 or 84 months makes almost any car look affordable. The catch: you pay far more interest, and you spend years underwater — owing more than the car is worth. A shorter term costs more per month but saves real money and builds equity faster. Compare 48, 60 and 72 months above and watch the total-interest line, not just the monthly figure.
Before you finance at the dealer
- Get pre-approved at your bank or credit union first. That gives you a real rate to beat and removes the dealer's incentive to mark up your financing.
- Negotiate the out-the-door price, not the payment.
- Put the tax in context: in most states you're taxed on the price after the trade-in, which is one genuine advantage of trading in.
- Skip padding: extended warranties and add-ons rolled into the loan accrue interest for years.
Frequently asked questions
How is sales tax handled in this car loan calculator?
Sales tax is applied to the vehicle price minus your trade-in, which reflects the rule in most U.S. states, then financed as part of the loan. Adjust the tax rate to match your state.
Does a trade-in lower my loan?
Yes. Your trade-in value (after paying off anything you still owe on it) reduces the amount financed just like a down payment, and in most states it also reduces the taxable price.
What car loan term should I choose?
Shorter is cheaper overall. A 72- or 84-month loan lowers the monthly payment but adds a lot of interest and keeps you owing more than the car is worth for longer. If a 48- or 60-month payment is affordable, it usually wins.
Should I get pre-approved before shopping?
Almost always. A pre-approval from your bank or credit union gives you a benchmark APR, so dealer financing has to beat a real number rather than whatever they offer first.
These calculators provide general estimates for educational purposes and do not constitute financial, tax, or legal advice. Figures are approximate; verify with a qualified professional and your lender before making decisions.