Auto Loan Calculator

How to use this calculator

Enter the vehicle price, your down payment, and any trade-in value. Add your state sales tax rate if you want it included, then choose the interest rate (APR) and the loan term. The calculator shows the estimated monthly payment, the amount you are financing, the total interest, and the total of all payments over the loan.

Try different terms and down payments. A larger down payment or a shorter term lowers the total interest, while a longer term lowers the monthly payment but costs more overall.

How an auto loan works

An auto loan is repaid in equal monthly payments over a fixed term. Each payment covers the interest charged that month, and the rest reduces the balance. Early payments are mostly interest because the balance is largest at the start; later payments go mostly to principal. The amount you finance is the price, plus any sales tax you include, minus your down payment and trade-in.

Longer terms have become common because they lower the monthly payment, but they also increase total interest and the time you spend owing more than the car is worth, since vehicles lose value quickly. The same principal-and-interest math applies to any installment loan, which we cover in How Mortgage Payments Work.

How the numbers are calculated

The amount financed is the price plus sales tax, minus the down payment and trade-in. The monthly payment is the standard amortization of that amount at one twelfth of the APR over the number of months in the term. Total of payments is the monthly payment times the number of months, and total interest is the total of payments minus the amount financed.

Assumptions

• A fixed APR and equal monthly payments for the whole term.
• Interest is compounded monthly on the remaining balance.
• Optional sales tax is applied to the vehicle price and added to the amount financed.
• The down payment and trade-in reduce the amount financed.
• Dealer fees, registration, and add-ons are not included unless you add them to the price.
• Figures are rounded to whole dollars.

Limitations

• This is an educational estimate, not a loan offer or an approval.
• The APR you are offered depends on your credit, the lender, and the vehicle.
• Sales tax, title, and registration rules vary by state; some states tax the price after the trade-in, which this tool does not assume.
• It does not model gap insurance, extended warranties, or other add-ons rolled into the loan. Add them to the price to approximate their effect.

Frequently asked questions

What loan term should I choose?

A shorter term means a higher monthly payment but less total interest and less time owing more than the car is worth. A longer term lowers the payment but raises the total cost. Choose the shortest term whose payment fits your budget.

Does this include sales tax?

Only if you enter a rate. When you do, the tax is applied to the vehicle price and added to the amount financed. Because tax rules differ by state, including whether a trade-in reduces the taxable amount, treat the result as an estimate.

What is the difference between the price and the amount financed?

The amount financed is what you actually borrow: the price plus any sales tax, minus your down payment and trade-in. Interest is charged on the amount financed, not the sticker price.

Does a bigger down payment help?

Yes. A larger down payment lowers the amount financed, which lowers both the monthly payment and the total interest, and reduces the chance of owing more than the vehicle is worth.

Is APR the same as the interest rate?

They are close for a simple auto loan. The APR also reflects certain financing fees, so it is the better figure for comparing offers. Use the APR from your loan offer for the most accurate estimate.