Financial

Auto Loan Calculator

Calculate monthly car loan payments including sales tax, trade-in value, dealer fees, and down payment. See the full amortization schedule.

Calculation Inputs

Vehicle Price ($)

Down Payment ($)

Trade-In Value ($)

Sales Tax Rate (%)

Dealer / Doc Fees ($)

Documentation, title, registration fees

APR (%)

Loan Term

Results computed instantly — your data never leaves your device.

Live Results

Real-Time

Monthly Payment

$663.74

Amount Financed

$33,600

After down + trade-in + tax + fees

Total Interest

$6,224.17

18.5% of financed amount

Total Loan Cost

$39,824.17

Financed amount + interest

Sales Tax

$2,800

8% on taxable base

Total Out-of-Pocket

$44,824.17

Down payment + all monthly payments

100% Client-SidePrivate & Secure

Cost Breakdown

Vehicle $35,000+Tax $2,800+Fees $800−Down $5,000=Financed $33,600

Amortization Schedule (annual)

Month	Payment	Principal	Interest	Balance
1	$663.74	$470.54	$193.2	$33,129.46
12	$663.74	$501.17	$162.57	$27,771.53
24	$663.74	$536.86	$126.87	$21,527.93
36	$663.74	$575.1	$88.63	$14,839.63
48	$663.74	$616.06	$47.67	$7,674.97
60	$663.74	$659.94	$3.79	$0

How to Use the Auto Loan Calculator

1
Enter the vehicle price, trade-in value (if any), and any down payment amount. The calculator shows the financed amount after deductions.
2
Enter your state/provincial sales tax rate — in most jurisdictions tax is calculated on the price after trade-in, reducing your tax bill.
3
Input dealer fees (documentation, destination, etc.), the lender's annual interest rate, and your loan term in months.
4
Review the Payment Breakdown showing the split between principal, interest, taxes, and fees — and scroll down for the full amortisation schedule.

Formula & Mathematical Basis

Amount Financed: A = (Vehicle Price − Trade-in − Down Payment) + (Vehicle Price − Trade-in) × Tax Rate + Dealer Fees Monthly Payment: M = A × r × (1 + r)^n ───────────────────── (1 + r)^n − 1 Total Cost: Total = M × n (includes all interest)

Variable Key

A

Amount financed — the actual loan principal including tax and fees

r

Monthly interest rate = Annual Rate ÷ 12 ÷ 100

n

Loan term in months (e.g. 48, 60, 72)

M

Fixed monthly payment

Tax Rate

State/provincial sales tax as a decimal (e.g. 6% → 0.06)

Trade-in

Value the dealer credits for your current vehicle, applied before tax in most states

📝 Sales tax is calculated on (Vehicle Price − Trade-in) in states that grant trade-in tax credits (39 US states + most Canadian provinces). In states without this credit (e.g. California prior to 2022), tax is calculated on the full vehicle price. Dealer fees (doc fee, destination, acquisition) are added after tax and are not typically taxed themselves.

Step-by-Step Examples

New car purchase with trade-in

Scenario: $38,500 new SUV, $8,000 trade-in, $2,000 down payment, 7% sales tax, $500 doc fee, 6.9% APR, 60-month term.

1.Taxable amount: $38,500 − $8,000 = $30,500. Sales tax: $30,500 × 7% = $2,135.
2.Amount financed: ($38,500 − $8,000 − $2,000) + $2,135 + $500 = $31,135.
3.Monthly rate: 6.9% / 12 / 100 = 0.575%.
4.Monthly payment: $31,135 × 0.00575 × (1.00575)^60 / [(1.00575)^60 − 1] = $613.47.
5.Total paid: $613.47 × 60 = $36,808.20. Total interest: $36,808.20 − $31,135 = $5,673.20.

✅ $613.47/month | $5,673 total interest | $36,808 total repaid on $31,135 financed

Used car — no trade-in, shorter term

Scenario: $18,000 used car, no trade-in, $1,800 down (10%), 8% sales tax, $300 doc fee, 9.5% APR, 48 months.

1.Sales tax: $18,000 × 8% = $1,440 (no trade-in to offset).
2.Amount financed: ($18,000 − $0 − $1,800) + $1,440 + $300 = $17,940.
3.Monthly rate: 9.5% / 12 / 100 = 0.7917%.
4.Monthly payment: $17,940 × 0.007917 × (1.007917)^48 / [(1.007917)^48 − 1] = $449.08.
5.Total interest: $449.08 × 48 − $17,940 = $3,616.

✅ $449.08/month | $3,616 total interest | Paid off in 4 years

Practical Use Cases

✓ Comparing total cost of different term lengths (48 vs 60 vs 72 months) on the same vehicle
✓ Calculating whether a larger down payment justifies the upfront cash reduction
✓ Assessing the value of a trade-in deal — understanding the tax savings it provides
✓ Stress-testing affordability at different interest rate scenarios before visiting a dealership
✓ Deciding between dealer financing and a pre-approved bank or credit union loan
✓ Planning your total monthly transportation budget including insurance and maintenance

Common Mistakes to Avoid

⚠ Focusing on monthly payment instead of total cost — dealers exploit this by stretching terms to 72–84 months.
⚠ Forgetting to include sales tax and dealer fees in the financed amount — they can add $2,000–$5,000+ to the loan.
⚠ Assuming the trade-in credit always reduces your taxable amount — check your state's rules, as some don't allow this deduction.
⚠ Accepting dealer financing without comparing pre-approved rates from a bank or credit union first.
⚠ Going underwater on the loan (owing more than the car's value) — especially risky with long-term loans on rapidly depreciating vehicles.
⚠ Not budgeting for insurance, registration, fuel, and maintenance — these can easily exceed the loan payment itself.

Glossary of Terms

Amount Financed: The actual dollar amount of the loan, equal to vehicle price minus trade-in and down payment, plus taxes and fees that are rolled into the loan.
Trade-in Credit: The value a dealer applies toward your purchase in exchange for your current vehicle. Reduces the financed amount and, in most states, the taxable base.
Dealer Documentation Fee: A fee charged by dealers to process paperwork. Ranges from $50 to $900+ depending on state. Some states cap it; it is almost always negotiable.
Negative Equity (Underwater): When you owe more on the loan than the vehicle's current market value. Common with long loan terms due to rapid early depreciation.
Pre-Approved Loan: A loan offer from a bank or credit union obtained before visiting the dealership, giving you a rate benchmark and stronger negotiating position.
GAP Insurance: Guaranteed Asset Protection — covers the difference between the insurance payout and remaining loan balance if the vehicle is totalled or stolen while you are underwater.
Amortisation Schedule: A complete table showing each payment split between interest and principal, and the remaining balance after each payment.

Frequently Asked Questions

How is sales tax calculated on an auto loan?

▾

Most US states (and Canadian provinces) calculate sales tax on the vehicle's selling price after deducting the trade-in value. For example, a $35,000 car with a $10,000 trade-in is taxed on $25,000. However, some states (e.g. California, Michigan) tax the full vehicle price regardless of trade-in. Always verify your state's specific rule. The tax amount is typically rolled into the loan.

Should I put more money down on a car loan?

▾

A larger down payment reduces the amount financed, lowers your monthly payment, and reduces total interest paid. It also protects against "being underwater" (owing more than the car is worth) — cars typically depreciate 15–25% in the first year. A common rule of thumb is to put down at least 20% on a new car and 10% on a used car.

What is the difference between the purchase price and the amount financed?

▾

The amount financed (the actual loan principal) = Vehicle Price − Trade-in Value − Down Payment + Sales Tax + Dealer Fees. Taxes and fees are typically added to the loan, which is why your financed amount is often higher than the sticker price minus your down payment.

Is a 72-month or 84-month auto loan a good idea?

▾

Longer terms lower monthly payments but significantly increase total interest and the risk of negative equity. A 72-month loan at 7% on a $35,000 vehicle costs approximately $4,500 more in interest than a 48-month loan. Most financial advisors recommend keeping auto loan terms at 48–60 months for new cars and 36–48 months for used vehicles to stay ahead of depreciation.

What is a good interest rate for a car loan?

▾

Auto loan rates vary by credit tier, term, and lender. As of 2024, average rates for new cars range from ~5% (excellent credit, 720+) to ~14%+ (subprime, below 580). Used car rates are typically 1–3 percentage points higher due to greater lender risk. Credit unions often offer rates 1–2% lower than banks for the same credit profile.

Sources & References

[1]
Auto Loans— Consumer Financial Protection Bureau (CFPB), 2024
[2]
Shopping for an Auto Loan— Federal Reserve (FRB), 2023
[3]
State Motor Vehicle Sales Tax Rates— Federation of Tax Administrators, 2024

CalculatorFree Auto Finance TeamCFPB auto lending guidelines review

Auto loan calculations verified against CFPB guidance. Sales tax methodology covers trade-in credit rules for all 50 US states.

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