How is the amount financed calculated?

Price minus down payment, trade-in value and rebates, plus anything still owed on the trade-in. Sales tax and fees are treated as paid upfront.

Is a 72 or 84 month car loan a bad idea?

It lowers the payment but costs more interest and makes it likely you will owe more than the car is worth for years. On 30,000 dollars at 7%, 84 months costs about 8,034 in interest versus 4,483 over 48 months.

Does my trade-in reduce sales tax?

In most states yes, because tax is charged on the price minus the trade-in. A few states, including California, tax the full price. Adjust the tax figure for your state.

What happens if I owe more than my trade-in is worth?

The difference, called negative equity, is added to the new loan. Enter it in the owed field to see the effect on the payment.

Should I take dealer financing?

Get a preapproval from a bank or credit union first so you know your rate. Use the dealer offer only if it beats that rate.

Auto Loan Calculator - Estimate Your Car Payment

Work out a car payment, trade-in and taxes included

Enter the vehicle price, your down payment, trade-in value, anything you still owe on the trade-in, rebates, sales tax, fees, the interest rate and the term. You get the monthly payment, the amount financed, the total interest and the total cost of the car.

How the numbers fit together

The amount financed is the price, minus your down payment, trade-in and rebates, plus whatever you still owe on the trade-in. Sales tax and title and registration fees are treated as paid upfront. Dealers often roll them into the loan instead; to model that, add them to the price and set the tax rate to zero.

This calculator applies sales tax to the full price. Most states tax only the difference between the price and your trade-in, while a few, California among them, tax the full price. If your state taxes the difference, lower the tax figure to match.

How the term changes the cost

On a 30,000 dollar loan at 7%:

48 months: about 718 dollars a month and 4,483 dollars of interest.
60 months: about 594 a month and 5,642 of interest.
72 months: about 511 a month and 6,826 of interest.
84 months: about 453 a month and 8,034 of interest.

Long terms make the payment look affordable, but a car loses value fastest in its first years. On a six or seven year loan you can easily owe more than the car is worth for much of the term, which becomes a problem if it is written off or you want to sell.

Negative equity

If you owe more on your current car than it is worth, the dealer adds the difference to your new loan. Enter the payoff in the owed field to see what that does. Rolling negative equity from one car into the next is one of the most common ways people end up with payments they cannot get out of.

A sensible benchmark

A widely used rule of thumb is 20/4/10: put at least 20% down, finance for no more than four years, and keep the payment, insurance and fuel under 10% of your gross income. Few buyers hit all three, but the further you stray, the more the car costs you.

Before you visit the dealer

Get a preapproval from your bank or a credit union first. It tells you the rate you qualify for, and dealers will often beat it. Negotiate the price of the car before discussing financing or monthly payments, because a low payment can hide a high price stretched over a longer term.

Estimates only, not financial advice. Rates depend on your credit, the lender, and whether the car is new or used.