How this auto loan calculator works
Start with the car's price, then subtract what you pay up front: your down payment and the value of your
trade-in. Sales tax and fees are added, and the rest is the amount you finance. Your monthly payment is
then calculated with the standard loan formula for the interest rate and term you choose.
Amount financed = price + sales tax + fees − down payment − trade-in
Example
A $35,000 car with $5,000 down, 7% sales tax ($2,450) and $800 in fees means financing $33,250. At 6.5%
for 60 months, the payment is about $650.57 a month and you pay roughly $5,784 in interest.
Tips for a cheaper car loan
- Get pre-approved by your bank or credit union before visiting the dealer, so you can compare their offer.
- Negotiate the price, not the payment. A low payment can hide a long term and a high total cost.
- Watch for add-ons such as extended warranties rolled into the loan.
- Keep the term short. Compare 48 and 72 months above to see how much interest a shorter loan saves.
Frequently asked questions
How is sales tax on a car calculated?
Most US states charge sales tax on the purchase price minus the value of your trade-in, which is how this calculator works. A few states tax the full price regardless of trade-in, and some have no sales tax on vehicles, so check your state's rules.
What fees should I include?
Typical fees are documentation (doc) fees, title and registration, and dealer prep charges. They often add a few hundred to a couple of thousand dollars. If you roll them into the loan, you also pay interest on them.
Is a 72- or 84-month car loan a good idea?
Longer loans lower the monthly payment but cost more in interest, and cars lose value quickly, so you can end up owing more than the car is worth. A term of 60 months or less is usually safer.
How much should I put down on a car?
A common guideline is 20% for a new car and 10% for a used one. A bigger down payment lowers your payment and total interest, and reduces the risk of owing more than the car is worth.
