How to use the auto loan calculator
Enter the vehicle price, your down payment, any trade-in, the loan's APR and term, plus your sales tax rate and fees. The calculator shows your monthly payment, the amount financed, total interest and the full cost of the vehicle, and compares every common loan term so you can see how much a longer loan really costs.
How a car payment is calculated
Auto loans are simple-interest installment loans. The amount financed is the price, plus sales tax and fees, minus your down payment and trade-in equity (trade-in value minus what you still owe on it). The monthly payment then uses the standard loan formula M = P × r ÷ (1 − (1 + r)−n), where r is the APR ÷ 12 and n is the number of months.
Sales tax and trade-ins
Most U.S. states charge sales tax only on the price after subtracting your trade-in, which can save hundreds of dollars. A few states (including California, Hawaii, Kentucky, Maryland, Michigan, Montana and Virginia, among others) tax the full price or have special vehicle tax rules. Untick the box above if your state does not give a trade-in tax credit. Use our sales tax calculator to find your state's rate.
Shorter vs. longer loans
A 72- or 84-month loan lowers the monthly payment but usually carries a higher rate and much more total interest. Long loans also raise the risk of being "upside down" — owing more than the car is worth — because cars depreciate fastest in the first few years. A common guideline is the 20/4/10 rule: put at least 20% down, finance for no more than four years, and keep total car costs below 10% of gross income.
Tips to get a lower auto loan rate
- Get pre-approved by a bank or credit union before visiting the dealer, so you can compare the dealer's offer.
- Check your credit report and improve your score before applying — rates differ by several percentage points between credit tiers.
- Negotiate the vehicle price separately from the financing and the trade-in.
- Watch for add-ons (extended warranties, GAP insurance) rolled into the loan, which increase the amount financed.
Frequently asked questions
What is a good APR for a car loan?
How much car can I afford?
Is it better to put more money down on a car?
Are dealer fees included in the loan?
Sources & methodology
This calculator was last reviewed on November 1, 2026. Figures are based on the following official and primary sources:
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