Auto Loan Calculator: Car Payment with Tax, Trade-In & Fees

How the auto loan calculator works

Start with the price of the car, then subtract your down payment and any trade-in. Sales tax and fees are usually rolled into the loan, so they're added back on top. That gives the amount financed, and the monthly payment is worked out from it with the standard loan formula using your APR and term.

Example

A $35,000 car with $5,000 down, 7% sales tax and $500 of fees means financing $32,950. At 7% APR over 60 months the payment is about $652 a month, and you'd pay around $6,200 in interest. Stretching the same loan to 72 months drops the payment to about $562, but the interest rises to roughly $7,500.

Long loans: lower payment, higher cost

72- and 84-month car loans are common because they make the monthly payment look affordable. The catch is that cars lose value quickly. With a long loan you can owe more than the car is worth for several years, which is a problem if you want to sell it or it's written off. Many advisers suggest keeping car loans to 60 months or less.

Tips for a cheaper car loan

Get pre-approved by a bank or credit union before visiting the dealer, so you have a rate to compare against dealer financing.
Negotiate the price, not the payment. A dealer can hit any monthly payment by stretching the term, so agree the price first.
Put more down. A 10–20% down payment reduces interest and the risk of owing more than the car is worth.
Check 0% offers carefully. They often replace a cash rebate, so compare the total cost both ways.

A common budgeting rule

The "20/4/10" rule suggests putting at least 20% down, financing for no more than 4 years, and keeping total car costs (payment, insurance and fuel) under 10% of your gross income. It's strict, but it keeps a car from crowding out saving and other goals.

Frequently asked questions

What's a good interest rate for a car loan?

It depends mostly on your credit score and whether the car is new or used. Borrowers with excellent credit get the lowest rates, often several points below those with fair credit, and used-car loans usually cost more than new-car loans. Compare a bank or credit union offer with the dealer's.

Is sales tax included in a car loan?

Usually, yes. Most buyers roll sales tax, title and registration fees into the loan. In most states your trade-in value is subtracted before sales tax is calculated, which this calculator does.

How long should a car loan be?

Shorter is cheaper. 36 to 60 months keeps total interest down and reduces the risk of owing more than the car is worth. 72- and 84-month loans lower the payment but cost much more overall.

How much should I put down on a car?

A common target is 20% for a new car and 10% for a used one. A bigger down payment means a smaller loan, less interest and less chance of being upside down on the loan.