KnowWiser

Money tools

Auto Loan Calculator

Estimate your monthly car payment, the amount you will finance after tax, fees, down payment and trade-in, and the total interest — then see exactly what a longer term costs.

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Applied to price after trade-in
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How this calculator works

First we work out how much you actually borrow:

Amount financed = Price + Sales tax + Fees − Down payment − Trade-in

Sales tax is charged on the price after your trade-in credit (the rule in most states). Then the monthly payment comes from the standard amortization formula, the same one used for mortgages:

M = P · r(1 + r)n / ((1 + r)n − 1)
  • P = amount financed
  • r = monthly interest rate (APR ÷ 12 ÷ 100)
  • n = term in months

Total interest is the sum of all payments minus the amount financed. Total cost of the car adds tax, fees, and interest to the sticker price — the number worth comparing between two deals.

Worked example

A $35,000 car with $5,000 down, 7% sales tax, $500 in fees, at 6.5% APR over 60 months: tax is $2,450, so the amount financed is $32,950. The payment is about $645 a month, total interest about $5,732, and the car’s all-in cost roughly $43,680. Stretching the same loan to 72 months drops the payment to about $554 but lifts total interest past $6,900.

Tips to pay less

  • Get pre-approved at a bank or credit union first, then let the dealer try to beat that rate.
  • Put down 20% if you can — it avoids being upside down and often earns a better APR.
  • Keep the term at 60 months or shorter; negotiate the price, not the payment.
  • Your APR tracks your credit score. See where you stand with the credit score simulator, and if you have a low score, read how to build credit from scratch before financing.
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Frequently asked questions

How is a car payment calculated?

It uses the standard amortization formula: M = P · r(1+r)^n / ((1+r)^n − 1), where P is the amount financed (price + sales tax + fees − down payment − trade-in), r is the monthly rate (APR ÷ 12), and n is the term in months. The payment is fixed; early payments are mostly interest, later ones mostly principal.

Is sales tax charged on the full price or after my trade-in?

Most states tax the price after the trade-in credit, which is how this calculator works. A handful of states (for example California, Virginia, and Michigan above a cap) tax the full price. Check your state’s rule or ask the dealer for the exact tax line on the buyer’s order.

Should I choose a longer term to lower the payment?

A longer term lowers the monthly payment but raises total interest, and you stay “upside down” (owing more than the car is worth) for longer. The comparison in the results shows the exact extra interest from stretching 48 to 72 months at your inputs. Many advisers suggest keeping car loans at 60 months or less.

What APR should I expect?

It depends on your credit score, whether the car is new or used, and the lender. In 2026, borrowers with excellent credit often see rates in the mid single digits on new cars; used cars and lower scores can run well into the teens. Get pre-approved by a bank or credit union before visiting the dealer so you have a rate to compare.

Why does the dealer’s quote differ from this?

Dealers may add documentation fees, dealer add-ons, GAP insurance, or extended warranties into the financed amount, and some states tax fees differently. Ask for the amount financed, APR, term, and payment in writing and plug those in here to check the math.