Auto Loan Calculator

How this calculator works

The monthly payment is calculated using the standard loan payment formula:

Monthly Payment = P × [r(1+r)^n] / [(1+r)^n − 1]

Where:

• P is the principal (amount financed after down payment and trade-in, with optional sales tax)
• r is the monthly interest rate (APR divided by 12)
• n is the number of monthly payments (loan term in months)

Amount financed = Vehicle price − Down payment − Trade-in value, plus sales tax if you choose to finance it.

Total interest = (Monthly payment × Number of payments) − Amount financed.

The amortization schedule shows how each monthly payment splits between interest and principal. Early in the loan, most of your payment goes to interest. As the principal balance shrinks, a larger share of each payment goes to principal.

This calculator assumes a fixed interest rate and monthly payments. Variable-rate loans, balloon payments, and prepayment penalties are not modeled.

Understanding your auto loan payment

Your monthly car payment is driven by four numbers: how much you borrow, your interest rate, how long you borrow for, and any sales tax you roll into the loan. Small changes to any of these can shift your total cost by thousands of dollars over the life of the loan.

Loan term: the most expensive trade-off

A longer loan term means a lower monthly payment — but significantly more interest paid. A 72-month loan on a $35,000 vehicle at 7% APR has a monthly payment of around $595 and total interest near $7,800. The same loan over 36 months jumps to around $1,080 per month, but total interest drops to around $3,900.

The right term depends on your budget and how long you plan to keep the vehicle. Lenders often price longer-term loans at slightly higher interest rates because the risk of depreciation outpacing loan payoff (being "underwater") is greater.

Down payment: the leverage point

A larger down payment reduces the amount you finance and lowers both your monthly payment and your total interest. As a general guideline, a down payment of at least 20% on a new car or 10% on a used car helps avoid being underwater on the loan, which can be a problem if the vehicle is totaled or you need to sell early.

Trade-in value works the same way as a down payment — it reduces the amount you finance.

APR: shop for your rate before you shop for the car

Your credit score, loan term, and whether the loan is for new or used strongly influence the APR you'll be offered. Dealership financing is often competitive but not always the best rate — credit unions and online lenders can be significantly cheaper. Get pre-approved before you walk into the dealership so you have a benchmark.

Sales tax: know how it's handled

Auto sales tax is calculated on the purchase price (minus any trade-in in most states) and can add 5–10% to the cost. You can pay sales tax upfront with your down payment or roll it into the loan. Rolling it in keeps your upfront cost lower but increases your total interest paid over the life of the loan.

What this calculator does not account for

This is an estimate based on the loan principal and interest. It does not include:

• Registration and title fees (vary by state)
• Documentation fees charged by the dealer
• Extended warranty or gap insurance premiums if financed
• Insurance premiums (separate from the loan)
• Variable-rate loans, balloon payments, or early payoff penalties

For a complete picture of total vehicle cost, try our total cost of ownership calculator which layers in fuel, maintenance, insurance, and depreciation alongside the loan payment.