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Calculator Answers

Car Payment Calculator

Blake Boege
Written by Blake Boege · Founder, Calculator Answers

A car payment calculator is a financial utility that estimates the monthly installment on an auto loan. It applies the standard amortization formula to the total purchase price of a vehicle after factoring in down payments, trade-in values, local sales tax rates, and registration fees. The calculator determines the monthly payment based on the annual interest rate (APR) and the repayment term in months. Buyers use this tool to compare financing options, negotiate at dealerships, and ensure their purchase aligns with their household budget.

Enter the vehicle price, your down payment and trade in, the sales tax rate, the loan term, the APR, and any fees. We show the monthly payment, sales tax, amount financed, total interest, and total cost.

See also: Auto Affordability Calculator, Lease Calculator, and Loan Payment Calculator – Amortization Tool.

Quick Answer

Estimate your monthly auto loan payment. Enter the vehicle price, down payment, trade-in value, interest rate, and loan term to calculate your monthly cost and total interest.

$

Sticker or negotiated price before tax. · e.g. 30,000

$

Cash you put toward the purchase up front. · e.g. 3,000

$

Credit your dealer gives for your old vehicle. · e.g. 0

%

Combined state and local rate. · e.g. 6

mo

Number of monthly payments. · e.g. 60

%

Annual percentage rate on the loan. · e.g. 7

$

Title, registration, doc fees rolled into the loan. · e.g. 0

Estimated car payment

Estimated monthly payment

$570.27

Over 60 months at 7% APR

Loan amount before tax$27,000.00
Sales tax$1,800.00
Amount financed$28,800.00
Total interest$5,416.47
Total of payments$34,216.47
Total cost incl. down payment$37,216.47
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Examples

$30,000 car, $3,000 down, 60 mo at 7% APR

≈ $570.27/mo · $5,416 interest

Same loan at 0% APR

= $480.00/mo · $0 interest

$25,000 car, $5,000 trade, 72 mo at 6% APR

≈ $351.35/mo · $4,097 interest

How it works

The calculator uses the standard amortized loan payment formula. The loan principal is the vehicle price minus your down payment and trade in, plus the sales tax on the taxable portion and any rolled-in fees.

Monthly car payment

M = P × r × (1 + r)^n / ((1 + r)^n − 1)

The parts

  • M = monthly payment
  • P = amount financed (price − down − trade + tax + fees)
  • r = monthly interest rate (APR ÷ 12 ÷ 100)
  • n = number of monthly payments

At 0% APR

M = P / n

What is a car payment?

A car payment is the fixed monthly amount you pay to a lender for an auto loan. Each payment covers a portion of interest and a portion of principal. Early payments are mostly interest, later payments are mostly principal. The size of the payment depends on the amount financed, the APR, and the loan term.

A car loan and an auto loan are the same thing under two names, and lenders use both. Whichever term the dealer or the bank puts on the paperwork, the payment comes out of the same four numbers: the amount financed, the APR, the term, and how much you put down. This page covers all three ways of asking.

How the car payment calculator works

Enter the vehicle price, your down payment, the trade in value, the sales tax rate, the loan term in months, the APR, and any fees you want rolled into the loan. The calculator computes:

  • Sales tax on the vehicle price minus the trade in value
  • Loan amount before tax (price minus down payment and trade in)
  • Amount financed (loan amount before tax + sales tax + fees)
  • Estimated monthly payment using the amortization formula
  • Total interest paid over the loan term
  • Total of payments and total cost including the down payment

Worked example

Vehicle price $30,000, down payment $3,000, trade in $0, sales tax 6%, loan term 60 months, APR 7%, fees $0.

  • Sales tax = 30,000 × 0.06 = $1,800
  • Loan amount before tax = 30,000 − 3,000 − 0 = $27,000
  • Amount financed = 27,000 + 1,800 = $28,800
  • Monthly payment ≈ $570.27
  • Total of payments ≈ $34,216
  • Total interest ≈ $5,416
  • Total cost incl. down payment ≈ $37,216

What affects your monthly car payment?

Four inputs move the monthly payment most: the amount you finance, the APR, the loan term, and how much sales tax and fees you roll into the loan. Small changes in any of these can add up to hundreds or thousands of dollars over the life of the loan.

Down payment and trade in value

A down payment is cash you put in up front. A trade in is credit for your old vehicle. Both reduce the amount financed and therefore the monthly payment. In many U.S. states, the trade in value is subtracted from the taxable price too, so a trade in can also lower the sales tax you pay.

APR and loan term

APR is the annualized cost of borrowing. The loan term is how many months you pay. A longer term spreads the loan over more payments, which lowers the monthly payment but raises the total interest. A lower APR cuts both the monthly payment and total interest. If you can refinance to a lower APR later, that often saves more than stretching the term.

For help thinking in percentages, the percentage increase calculator can compare two APR scenarios side by side.

Sales tax and fees

Sales tax in the U.S. is set at the state and local level. Combined rates typically range from 0% to over 10%. Most states tax the vehicle price minus the trade in value. Title, registration, and document fees are usually small but can be rolled into the loan, in which case they earn interest along with the rest of the balance. Our sales tax calculator can help you check the tax portion separately.

Common mistakes

  • Forgetting that taxes and fees rolled into the loan also accrue interest.
  • Picking a longer term to lower the monthly payment without checking the total interest you would pay over the term.
  • Quoting APR and monthly interest rate as if they were the same number. Monthly rate is APR divided by 12.
  • Ignoring the down payment when comparing total cost between offers.
  • Confusing the loan amount before tax with the amount financed. The amount financed adds the sales tax and any rolled-in fees.

Related tools

Disclaimer. This calculator is an estimate for general educational use. Actual loan terms, taxes, fees, and rates can vary by lender, dealer, state, credit profile, and purchase details. The calculator is not a loan offer or approval and is not financial advice.

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Auto Affordability CalculatorEstimate the max vehicle price you can afford from monthly budget, down payment, trade-in, APR, term, sales tax, and fees.Lease CalculatorEstimate a vehicle lease monthly payment from MSRP, negotiated price, residual value, money factor, term, sales tax, fees, down payment, and trade-in. Returns depreciation, finance charge, monthly payment, and total lease cost.Loan Payment Calculator – Amortization ToolCalculate monthly payments, total interest, and payoff time using our loan payment calculator. Enter the loan amount, annual interest rate, and term.Amortization CalculatorCalculate your monthly loan payments, see the principal and interest breakdown, and generate a full month-by-month amortization schedule for any fixed-rate loan.

Frequently asked questions

A car payment is calculated with the standard amortized loan formula: monthly payment = P × r × (1 + r)^n / ((1 + r)^n − 1). P is the amount financed (vehicle price minus down payment and trade in, plus sales tax and any rolled-in fees), r is the monthly interest rate (APR divided by 12 and then by 100), and n is the number of monthly payments. If APR is 0%, the payment simplifies to P / n.

Four things move the payment most: vehicle price, the amount you put down or trade in, the APR, and the loan term. A higher price or APR raises the payment. A larger down payment, a bigger trade in, or a lower APR lowers it. A longer term lowers the monthly payment but raises total interest paid over the life of the loan.

Yes. A down payment reduces the amount financed, which directly reduces both the monthly payment and the total interest paid. It also lowers the risk of being upside down on the loan if the car loses value faster than the balance is paid down.

Yes, a trade in reduces the amount financed. In many U.S. states the trade in value is also subtracted before sales tax is calculated, which lowers the tax bill on the new car. The calculator applies sales tax to the vehicle price minus the trade in value.

APR is the annualized cost of the loan, expressed as a percentage. A higher APR raises the monthly payment and the total interest paid. Even a one percentage point change in APR can move the monthly payment by several dollars on a typical car loan, and tens or hundreds of dollars in total interest over the term.

A longer term gives you a lower monthly payment, but you pay more total interest because the balance is outstanding longer. A 72 or 84 month loan can also leave you owing more than the car is worth for much of the term. Pick the shortest term you can comfortably afford.

It usually does. If you finance the sales tax with the loan, the tax is added to the amount financed and you pay interest on it. The calculator follows this common case: sales tax is computed on the vehicle price minus any trade in, then added to the amount financed.

Amount financed is the loan principal: vehicle price minus down payment and trade in, plus sales tax and any rolled-in fees. Total cost includes the down payment plus every monthly payment over the life of the loan, so it covers both what you borrowed and the interest you paid on it.