About this calculator
A car loan is not priced on the sticker. What you actually finance is the vehicle price minus your down payment and trade-in, plus the sales tax on the purchase and the title, registration and dealer fees — and on a typical deal those additions and deductions move the loan by thousands of dollars in both directions. This calculator works the way a dealer’s worksheet does: every line of the deal goes in, and the monthly payment, the total interest and the month-by-month schedule come out.
The term is the expensive dial. On the default deal here — $32,500 financed at 7.9% — stretching from 60 to 84 months cuts the payment by about $152 a month but adds roughly $2,969 in interest, and it keeps you owing more than the car is worth for longer. Compare the total interest at two or three terms before you let a monthly payment talk you into a longer loan.
How to use it
- Enter the vehicle price you negotiated — not the loan amount; the calculator builds that for you.
- Enter your cash down payment and the dealer’s trade-in credit for your current car.
- Enter your state and local sales tax rate; in most states the tax applies to the price after the trade-in credit (the formula section covers the exceptions).
- Add the title, registration and dealer fees from the buyer’s order, then set the APR and a term between 12 and 84 months.
- Read the amount financed first — that is the loan you are really signing — then the payment and total interest.
The formula
Most states charge sales tax on the price after the trade-in credit; a minority — California, Hawaii, Kentucky, Michigan, Virginia and Washington DC among them — tax the full price before any trade-in. If your state is one of those, set the tax rate here so it applies to the price with no trade-in entered, then add the trade-in as an extra down payment instead — the financed amount comes out the same. Total cost counts everything you hand over: the down payment, the trade-in value, and every monthly payment including interest.
Worked example
A $35,000 car with $5,000 down, no trade-in, 6% sales tax and $400 of fees: the tax is $2,100, so you finance $35,000 + $2,100 + $400 − $5,000 = $32,500. At 7.9% APR over 60 months the payment is $657.43, total interest is $6,945.71, and the car costs $44,445.71 all-in. Add a $5,000 trade-in on a $30,000 car at a 7% tax rate and the tax falls to $1,750 — the trade-in saves tax as well as principal in most states.
Sources: Standard amortizing-loan formula; sales tax applied to the post-trade-in price, the practice in most US states (a minority, including California, tax the full price — the page explains the adjustment). Last updated: October 2026.
Frequently asked questions
How much does a trade-in save on an auto loan?
Twice over, in most states. The trade-in reduces the amount financed dollar for dollar, and because most states levy sales tax on the price after the trade-in credit, it also cuts the tax: a $5,000 trade-in at a 7% rate saves $350 of tax before it saves a cent of interest. In the states that tax the full price (California and a handful of others) you only get the principal saving.
Is a 72- or 84-month auto loan a good idea?
It lowers the payment, but at a price: on $32,500 at 7.9%, an 84-month term costs about $2,969 more interest than 60 months, and the balance falls so slowly that the loan can sit above the car’s value for years (being “upside down”), which hurts if the car is written off or you need to sell. Long terms make most sense at low promotional APRs, where the extra interest is small.
What APR should I expect on a car loan?
It is set mainly by your credit score and whether the car is new or used. In recent Federal Reserve and Experian data, borrowers with scores above 720 have typically paid around 5%–7% on new-car loans, the average borrower around 9%, and scores below 620 often mean 13% or more; used-car rates run roughly 2–3 points higher. Get a pre-approval from your bank or credit union before visiting the dealer — it is the number the dealer then has to beat.
Should dealer fees be financed or paid in cash?
Paying them in cash is cheaper — every dollar financed costs interest for the whole term. The fees themselves (title, registration, documentation) are mostly fixed by the state or the dealer’s standard charge; the one worth questioning is an inflated “doc fee”, which ranges from under $100 in some states to over $800 in others and is occasionally negotiable on the vehicle price instead.
How is an auto loan payment calculated?
With the standard amortization formula: the amount financed is spread over the term at the monthly rate (APR ÷ 12), so each payment covers that month’s interest on the remaining balance plus a slice of principal. Early payments are mostly interest; by the final year almost all of each payment is principal. The schedule under the calculator shows the split for every month of your loan.
What formula does this auto loan calculator use?
Amount financed = price + sales tax + fees − down payment − trade-in, where sales tax = (price − trade-in) × tax rate. Payment = P × r(1 + r)^n ÷ ((1 + r)^n − 1) Most states charge sales tax on the price after the trade-in credit; a minority — California, Hawaii, Kentucky, Michigan, Virginia and Washington DC among them — tax the full price before any trade-in. If your state is one of those, set the tax rate here so it applies to the price with no trade-in entered, then add the trade-in as an extra down payment instead — the financed amount comes out the same. Total cost counts everything you hand over: the down payment, the trade-in value, and every monthly payment including interest. The worked example on this page applies the formula step by step with real numbers, so you can verify the result by hand.