What this calculator does
Find out what your car payment will be each month. Enter the price, your down payment, your trade-in, sales tax, fees, the interest rate and how long the loan runs. You'll see how much you're borrowing, the cash you need at signing, the total interest and what the car really costs in all. A table also compares the payment and interest for loans of 36 to 84 months.
The sticker price is only the starting point. What you actually borrow depends on your down payment and what your current car is worth as a trade-in. It also depends on whether you still owe money on that car. And it depends on whether you pay the sales tax and dealer fees at signing or add them to the loan. The calculator walks through each piece in order, so you can see how the loan amount is built.
Where it's used
Why this math matters outside the classroom:
- Monthly car payment. Financing $30,000 at 7% for 60 months costs about $594.04 a month.
- Stretching the term. The same $30,000 at 7% over 72 months drops to about $511.47 a month but adds more total interest.
- Trade-in value. Buyers subtract trade-in equity and a down payment from the price to find how much they actually need to borrow.
- Taxes and fees. Rolling sales tax and dealer fees into the loan raises the amount financed, so the monthly payment goes up too.
- Dealer quotes. Shoppers check a quoted payment by entering the price, rate and term to see whether the numbers agree.
Grade level and standards: Grades 11–12; Common Core State Standards for Mathematics HSA.SSE.B.4. © Copyright 2010. National Governors Association Center for Best Practices and Council of Chief State School Officers. All rights reserved.
How to use it
- Enter the car's price, your down payment, the trade-in value and anything you still owe on the trade-in.
- Enter your local sales tax rate. Choose whether tax is charged on the full price or on the price after the trade-in. Then add any title, registration or dealer fees.
- Choose whether the tax and fees go into the loan or get paid up front.
- Enter the APR and the loan length in months or years. Then read your monthly payment, the amount you're borrowing and the total interest. The table shows how a shorter or longer loan changes them.
What the inputs mean
- Trade-in value
- What the dealer is giving you for your current car. Leave it at 0 if you aren't trading one in.
- Amount still owed on the trade-in
- What it would take to pay off the loan on your current car. If you owe more than the trade-in is worth, that gap is called negative equity. It gets added to your new loan.
- Sales tax rate
- Your combined state and local sales tax rate. Rules differ from place to place, so check what applies where you'll register the car.
- Sales tax is charged on
- Many places tax only the new car's price minus your trade-in value. Others tax the full price. Pick the one that matches where you live.
- Title, registration and dealer fees
- One-time charges such as title, registration, paperwork and plate fees. This calculator doesn't add sales tax to them.
- Interest rate (APR)
- The loan's yearly interest rate (APR stands for annual percentage rate). The calculator divides it by 12 to get a monthly rate, because interest is charged every month.
Formula and method
sales tax = tax rate × (price, or price − trade-in value) trade-in equity = trade-in value − amount owed on it amount financed = price − down payment − trade-in equity (+ tax + fees if rolled in) i = APR ÷ 12; payment = P × i ÷ (1 − (1 + i)^(−n)) total interest = payment × n − P
In the formulas, P is the amount financed (what you borrow), i is the monthly interest rate and n is the number of monthly payments. Trade-in equity is the part of your old car you own outright. The payment formula is the standard one for car loans and mortgages. It finds the one monthly amount that pays off the loan, with interest, in exactly n months. At 0% APR, the payment is P ÷ n.
Negative trade-in equity makes your loan bigger, because the new lender pays off your old loan. Adding tax and fees to the loan makes it bigger too, and you pay interest on them the whole time.
Worked example
A $32,000 car with $4,000 down, a $6,000 trade-in that still has $2,000 owed, 7% sales tax on the full price, $600 of fees rolled into the loan, at 6.5% APR for 60 months.
- Sales tax: $32,000 × 7% = $2,240.
- Trade-in equity: $6,000 − $2,000 = $4,000.
- Amount financed: $32,000 − $4,000 − $4,000 + $2,240 + $600 = $26,840.
- Monthly rate: 0.065 ÷ 12 ≈ 0.00541667.
- Payment: $26,840 × 0.00541667 ÷ (1 − 1.00541667^(−60)) ≈ $525.16.
- Total interest: $525.16 × 60 − $26,840 ≈ $4,669.33.
Result: The monthly payment is about $525.16, with $4,000 due at signing and about $4,669.33 of interest. The price, tax, fees and interest together come to about $39,509.33.
Understanding the result
The amount financed is the number your payment is based on. If it's close to or above the car's value, you start the loan owing more than the car is worth.
Paying tax and fees up front lowers both the payment and the total interest, because you aren't borrowing them. Try both options to see the difference for your deal.
A longer loan lowers the monthly payment but adds to the total interest. In the example, going from 60 to 72 months cuts the payment from $525.16 to $451.18. But it adds $975.53 of interest. The table shows this for every common loan length.
Assumptions and limitations
- The APR stays the same for the whole loan. The calculator divides it by 12 to get the monthly rate.
- You make equal monthly payments, starting one month after the loan begins.
- Sales tax uses the single rate you enter, on either the full price or the price minus the trade-in value. Fees aren't taxed.
- Rebates aren't handled on their own. Subtract any rebate from the price, or add it to the down payment.
- The table uses the same APR for every loan length. Lenders often charge higher rates for 72- and 84-month loans, so the real gap is usually bigger.
- Payments aren't rounded to the cent, so a lender's final payment may differ by a few cents.
- Sales tax rules vary from place to place. Some have caps or exemptions, or treat rebates and trade-ins differently. Check the tax with your dealer or local tax office.
- Add-ons such as extended warranties, service plans or gap coverage aren't included unless you add them to the fees.
- The total cost of the car covers the price, tax, fees and interest on this loan. Any negative equity from your old loan isn't counted as part of the new car's cost.
- Lenders may figure interest daily or round differently, so their numbers can differ slightly. These results are estimates, not a loan offer.
Frequently asked questions
What is negative equity on a trade-in?
It means you owe more on your current car than it's worth. The dealer still pays off the old loan, and the difference gets added to your new loan. So you pay interest on it. To see the effect here, enter a trade-in value lower than the amount owed.
Should I roll tax and fees into the loan?
Rolling them in means less cash at signing. But it makes the loan, the monthly payment and the total interest bigger. If you have the cash, paying them up front is cheaper overall.
Does my trade-in reduce the sales tax?
In many places, the trade-in value is subtracted before tax is figured, which can save you a good amount. Other places tax the full price. Choose the option that matches where you register the car.
How much should I put down on a car?
There's no single right amount. But a bigger down payment lowers the loan, the payment and the interest. It also makes it less likely you'll owe more than the car is worth early in the loan.
Is a 72- or 84-month car loan a good idea?
It lowers the payment, but you pay interest for longer, often at a higher rate. The car can also lose value faster than you pay the loan down, so you may owe more than it's worth. The table shows the extra interest at your rate. If a longer loan is the only way the payment fits, it may be worth looking at a cheaper car.
How does my credit affect the APR I get?
Lenders set car-loan rates mostly by your credit history, the loan length and whether the car is new or used. So two buyers can get very different rates for the same car. Get a preapproval quote from a lender, and enter that rate here instead of an advertised one.
Why does the dealer's payment differ from this one?
Dealers may include add-ons, use a slightly different rate or fee, count days differently, or round each payment. Ask for an itemized buyer's order, a list of every charge, and enter those exact numbers here to compare.
How this calculator is checked
Method: Standard level-payment amortization formula with monthly rate = APR ÷ 12; amount financed derived from price, down payment, trade-in equity, and optionally sales tax and fees. The calculation is covered by automated tests with known reference values and edge cases. Last updated 2026-10-18. Found a problem? Tell us.
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