Auto Loan Calculator
Find your monthly car payment, total interest and total cost — including sales tax, down payment and trade-in.
How the Auto Loan Calculator Works
Use this auto loan calculator before you visit a dealership. Enter the price, your down payment, trade-in value, expected APR and loan length to see the monthly payment and the full cost of borrowing. Comparing a 48-month loan with a 72-month loan shows why longer terms feel cheaper each month but cost much more in interest.
Tips for a Lower Car Payment
- Get pre-approved by a bank or credit union so you can compare against dealer financing.
- Put down as much as you comfortably can to reduce interest and avoid owing more than the car is worth.
- Choose the shortest term whose payment fits your budget.
- Improve your credit score before applying — see our credit score guide.
Example: A $32,000 Car
Buy a $32,000 car with $4,000 down, 6% sales tax and a 7% APR over 60 months and the amount financed is about $29,900 with a payment near $592 a month. Stretching the same loan to 84 months drops the payment to roughly $455 but adds well over $1,500 in extra interest.
Long terms also raise the risk of owing more than the car is worth, which is why financing for more than five years is generally discouraged.
How to Read Your Results
Compare the monthly payment with about 10% to 15% of your take-home pay, then add insurance, fuel and maintenance. The total cost line includes your down payment and trade-in so you can compare offers on an equal basis.
Tips for a Better Deal
- Get pre-approved by a credit union before visiting the dealer.
- Negotiate the out-the-door price first, not the payment.
- Decline unnecessary add-ons.
- Choose the shortest term you can comfortably afford.
How the Auto Loan Payment Is Calculated
An auto loan is an installment loan, so the monthly payment uses the same amortization formula as other fixed-rate loans: payment = amount financed × r ÷ (1 − (1 + r)^−n), where r is the APR divided by 12 and n is the number of months. The amount financed is the vehicle price minus your trade-in, plus sales tax, minus your down payment. The calculator applies sales tax to the price after trade-in, which is how many states handle it, and then adds the total cost of all payments, your down payment and your trade-in to show the full cost of ownership.
Payments for Common Loan Scenarios
Here is how term, rate and loan size change what you pay:
| Amount financed | Term | APR | Monthly payment | Total interest |
|---|---|---|---|---|
| $24,000 | 60 months | 5% | $453 | $3,175 |
| $24,000 | 60 months | 7% | $475 | $4,514 |
| $24,000 | 60 months | 9% | $498 | $5,892 |
| $24,000 | 72 months | 7% | $409 | $5,461 |
| $24,000 | 84 months | 7% | $362 | $6,427 |
| $40,000 | 60 months | 7% | $792 | $7,523 |
Notice how the longer terms lower the monthly payment but increase total interest, and how each percentage point of APR adds hundreds of dollars over the loan. Check how your credit tier affects the rate in what is a good credit score.
Step-by-Step: Get the Most From This Calculator
- Enter the price you expect to pay, including options, but not fees rolled into the loan unless you plan to finance them.
- Enter your down payment. Aim for at least 10% to 20% to avoid owing more than the car is worth.
- Enter your trade-in value. Get offers from at least two buyers before deciding.
- Use the APR from a pre-approval, not the advertised best rate.
- Compare terms of 48, 60 and 72 months.
- Add insurance, fuel and maintenance to see the true monthly cost. See auto insurance tips.
Factors That Change Your Auto Loan Rate
- Credit score: the biggest factor, with prime borrowers paying far less than subprime borrowers.
- Loan term: longer terms often carry higher rates.
- New vs used: used-car loans typically carry higher rates.
- Down payment: more equity reduces the lender's risk.
- Lender type: credit unions, banks and dealer financing can differ by a full point or more.
- Debt-to-income ratio: check yours with the DTI calculator.
Buying Smart: Related Guides
Before you sign, read how to buy a car smart, compare options in lease vs buy a car and consider GAP insurance if you have a small down payment. For other loans, use the loan payment calculator.
Mistakes to Avoid When Financing a Car
- Focusing on the monthly payment instead of the total price and term.
- Rolling negative equity from an old loan into a new one.
- Accepting dealer add-ons without comparing prices.
- Skipping pre-approval and losing negotiating power.
- Choosing an 84-month loan on a vehicle that will depreciate faster than you pay it down.
- Forgetting sales tax, registration and title fees in the budget.
Worked Example: A $32,000 Vehicle Step by Step
Suppose you buy a $32,000 car with a $4,000 down payment, no trade-in, 6% sales tax and a 7% APR over 60 months. Sales tax is $1,920, so the total to finance before your down payment is $33,920. After the $4,000 down payment, you finance $29,920. The monthly rate is 0.07 ÷ 12 = 0.005833, and there are 60 payments. The formula gives a payment of about $592. Over 60 months you pay about $35,547 in total to the lender, which is $5,627 of interest, and your total outlay including the down payment is about $39,547. If you extend to 72 months, the payment drops to about $510 but interest rises to about $6,800. Use the calculator to see your own numbers.
Understanding Each Input
- Vehicle price: the negotiated price before taxes and fees.
- Down payment: cash paid at signing. A larger amount lowers the loan and reduces the risk of negative equity.
- Trade-in value: the amount a dealer or buyer will pay for your current car, which may reduce sales tax in many states.
- APR: the yearly interest rate including certain fees.
- Loan term: longer terms reduce the payment but increase interest.
- Sales tax: the combined state and local rate.
Understanding the Results
The monthly payment is your fixed installment. Amount financed is what the lender pays the seller. Sales tax shows the tax included. Total interest is the cost of borrowing. Total of all payments adds every installment, and total cost adds your down payment and trade-in so you can compare offers accurately. Also compare the payment with your budget: many planners suggest keeping total car expenses to about 15% of take-home pay.
Factors that change your real auto loan cost
Your interest rate on an auto loan depends heavily on your credit score, the loan term, whether the car is new or used, and current market rates, and even a difference of a few percentage points can add up to thousands of dollars over the life of a longer loan term.
Loan term also matters more than many buyers realize: stretching a loan from 48 to 72 months lowers the monthly payment but usually increases the total interest paid significantly, and can leave you owing more than the car is worth for a longer stretch of the loan, sometimes called being underwater or upside-down on the loan.
How your paycheck factors into an affordable auto loan
A common budgeting guideline suggests keeping total vehicle costs, including the loan payment, insurance, and fuel, under roughly 15% to 20% of your monthly take-home pay, though this can vary based on your other financial obligations and priorities.
Using an actual take-home pay estimate from a paycheck calculator, rather than your gross salary, gives a more realistic picture of what auto loan payment you can comfortably afford without straining your monthly budget after taxes and other paycheck deductions are accounted for.
Glossary of Auto Financing Terms
- APR (annual percentage rate): the yearly cost of the loan including interest and some fees.
- Amount financed: the price plus taxes and fees, minus the down payment and trade-in equity.
- Negative equity: owing more than the car is worth. It often happens with small down payments and long terms.
- Out-the-door price: the total including taxes, title, registration and dealer fees.
- Pre-approval: a lender's conditional offer that lets you shop with a known rate.
- Prepayment penalty: a fee for paying the loan off early, which is rare but worth checking.
- Simple interest loan: interest accrues daily on the balance, so paying early reduces interest.
Questions to Ask Before You Sign
- What is the APR and is it fixed for the entire term?
- What is the total amount financed and what is included in it?
- Are there any fees for documentation, dealer prep or add-ons?
- Is there a prepayment penalty?
- Does the loan have GAP coverage, and can I buy it elsewhere for less?
- Will my down payment or trade-in change the rate or terms?
Take time to read the contract. If anything differs from what you were quoted, ask for the change in writing before signing.
Auto Loan results at a glance
These are the calculator's results at different values of vehicle Price, with every other input left at the example values above (the bold row is the example). Use them to see how quickly the result changes before entering your own numbers.
| Vehicle Price | Estimated Monthly Payment | Amount financed | Sales tax |
|---|---|---|---|
| $16,000 | $256.62 | $12,960.00 | $960.00 |
| $24,000 | $424.54 | $21,440.00 | $1,440.00 |
| $32,000 | $592.45 | $29,920.00 | $1,920.00 |
| $40,000 | $760.37 | $38,400.00 | $2,400.00 |
| $48,000 | $928.28 | $46,880.00 | $2,880.00 |
| $64,000 | $1,264.11 | $63,840.00 | $3,840.00 |
| $96,000 | $1,935.77 | $97,760.00 | $5,760.00 |
How loan Term changes the result
The same example with each loan Term option:
| Loan Term | Estimated Monthly Payment | Amount financed | Sales tax |
|---|---|---|---|
| 36 months | $923.84 | $29,920.00 | $1,920.00 |
| 48 months | $716.47 | $29,920.00 | $1,920.00 |
| 60 months | $592.45 | $29,920.00 | $1,920.00 |
| 72 months | $510.11 | $29,920.00 | $1,920.00 |
| 84 months | $451.57 | $29,920.00 | $1,920.00 |
What changing down Payment does
Holding everything else at the example values, here is the effect of down Payment:
| Down Payment | Estimated Monthly Payment | Amount financed | Sales tax |
|---|---|---|---|
| $2,000 | $632.05 | $31,920.00 | $1,920.00 |
| $4,000 | $592.45 | $29,920.00 | $1,920.00 |
| $6,000 | $552.85 | $27,920.00 | $1,920.00 |
| $8,000 | $513.25 | $25,920.00 | $1,920.00 |
Common Questions
How much car can I afford?
Many planners suggest keeping total car costs (payment, insurance, fuel and maintenance) under about 15% of take-home pay, and financing for no more than 60 months.
Is the sales tax calculated on the trade-in?
In many states sales tax applies only to the price minus your trade-in, which is how this calculator treats it. Rules vary by state, so confirm locally.
Should I choose a 0% dealer offer or a rebate?
Compare both by running the numbers; a cash rebate plus a low-rate outside loan can beat 0% financing.
Does a larger down payment lower my rate?
It can, since lenders see lower risk, and it always lowers the amount financed.
How much should I spend on a car?
Many planners suggest total car costs of about 15% of take-home pay or less, with a loan of 60 months or less.
Is it better to get financing from a dealer or a bank?
Compare both. A pre-approval from a bank or credit union gives you a baseline to negotiate.
What is a good APR on a car loan?
It depends on credit, term and vehicle age; better credit generally means significantly lower APRs.
Should I put 20% down on a car?
It helps avoid negative equity, but any meaningful down payment reduces interest and risk.
Can I pay off my car loan early?
Most auto loans allow it, but check for prepayment penalties.
What if I pay cash for part of the car?
Enter that cash as the down payment to reduce the amount financed.
How do I include fees like registration?
Add them to the vehicle price if you plan to finance them.
Does a longer loan term always cost more overall?
Usually yes; while it lowers your monthly payment, a longer term generally means paying more total interest over the life of the loan.
What percentage of my take-home pay should go to a car payment?
A common guideline is to keep total vehicle costs (payment, insurance, and fuel) under about 15-20% of your monthly take-home pay, though this varies by individual circumstances.
How much is a $30,000 car loan per month?
About $594 a month over 60 months at 7% APR, before taxes and fees; a 72-month term lowers it to about $511 but adds interest.
How to check this calculator
This calculator shows the tax year, assumptions, inputs, and worked examples used to explain the estimate. Where result tables are provided, you can enter the example values in the calculator and compare the output with the displayed example to reproduce the calculation.
Tax and payroll rules can change, and a calculator estimate is not the same as an employer payroll statement or filed tax return. For an important decision, compare the result with your pay stub and the relevant official IRS, Social Security Administration, Department of Labor, or state guidance. See our methodology and editorial approach for source and review information.
Results are estimates for education only and are not financial, tax or legal advice.