Auto Loan Calculator

How to use this tool

1. Enter the vehicle price. Type the full purchase price of the vehicle before any discounts or negotiation.
2. Add down payment and trade-in. Enter your down payment, trade-in value, and any payoff still owed on the trade. Net trade equity reduces the amount financed; negative equity increases it.
3. Set sales tax and interest rate. Enter an estimated sales tax rate and choose the taxable price rule for your state. Add a lender APR, fees, or rebate in the advanced options.
4. Choose the loan term. Select the number of months for your loan (24 to 84 months are common options).
5. Review results. See your monthly payment, total interest, and true cost of the vehicle - update any input to recalculate instantly.

How auto loan financing works

When you finance a car, a lender pays the dealer and you repay the lender in monthly installments over the loan term. Each payment covers that month's interest plus a portion of the principal. The monthly payment formula is:

M = P × r(1+r)ⁿ ÷ ((1+r)ⁿ − 1)

where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the number of monthly payments.

The amount financed starts with the vehicle price, then accounts for any rebate, the selected sales-tax base, fees you choose to roll into the loan, your down payment, and the net equity in your trade. Net trade equity is the trade-in value minus its payoff: positive equity lowers the new loan, while negative equity adds the amount still owed. You can compare tax on the full vehicle price with tax on the price after trade-in; rules vary by state, and this calculator does not choose a state or determine a dealer's exact taxable amount.

Choose whether to include sales tax and the fees you enter in the loan. If you pay those costs upfront, the result separates them into estimated cash due at signing. Rebates lower the financed amount, while tax is estimated on the pre-rebate price because rebate tax treatment differs by location. For example, if a $30,000 car has $2,000 of positive trade equity and a $1,000 rebate, both credits reduce the principal; any unpaid balance on the trade reverses some or all of that reduction.

Use Payment → Price to solve the same deal structure in reverse. Enter the monthly payment limit you want to stay under and the calculator estimates the highest vehicle price that fits that payment, given your rate, term, down payment, trade, tax, fees, and rebate. This is a financing estimate rather than a full ownership budget: insurance, fuel, maintenance, depreciation, registration renewals, and lender-specific charges are not included unless you enter them as fees.

Should I take dealer financing or a bank loan?

Dealers often advertise special manufacturer financing rates (0% APR promotions, for example) that can be genuinely excellent, but only for buyers with strong credit. In other cases, dealer finance rates are marked up above the rate the bank actually quotes, because the dealer earns a commission on the spread.

The safest approach: get pre-approved by your bank or credit union before visiting the dealership. Use that rate as your baseline. If the dealer can beat it, take the dealer offer; if not, use your pre-approval.

How loan term affects total cost

As the table shows, stretching to 72 months saves $68/month vs. 60 months, but costs $1,000 more in total interest. A longer term also means the car depreciates faster than you pay down principal, which can leave you underwater.

Total cost of ownership

The sticker price and loan payment are only part of the true cost of owning a vehicle. Consider these additional ongoing expenses:

• Insurance: Varies widely by age, location, driving record, and vehicle. Full coverage on a new car typically costs $1,500–$3,000/year.
• Fuel: At 15,000 miles/year and $3.50/gallon, a 30 MPG car costs ~$1,750 in fuel annually; a 20 MPG truck costs ~$2,625.
• Maintenance: Budget ~$500–$1,000/year for routine maintenance (oil changes, tires, brakes). Older vehicles may cost more.
• Depreciation: A new car loses ~20% of its value in the first year and ~50% over five years. This is the largest single ownership cost for most buyers.
• Registration and taxes: Annual registration fees and property taxes vary by state, often $200–$600/year.

Down payment strategy

A 20% down payment is the traditional recommendation for a new car purchase. This reduces your monthly payment and, importantly, keeps your loan balance below the car's actual value from day one. A new car depreciates by roughly 10–20% the moment it leaves the lot. Without a meaningful down payment, you are immediately underwater (owing more than the car is worth), which creates financial risk if the car is totaled or you need to sell.

GAP insurance

GAP (Guaranteed Asset Protection) insurance covers the difference between your loan payoff amount and the actual cash value of the car if it is totaled or stolen. It is most relevant when you:

• Made a small or no down payment (loan balance exceeds car value)
• Took a long-term loan (72–84 months), where early payments cover mostly interest
• Purchased a vehicle known for rapid depreciation

GAP insurance purchased through a dealer is often overpriced ($400–$800). Many auto insurers offer standalone GAP coverage for $20–30/year added to your comprehensive policy.