Car Loan Calculator
Monthly payment with down payment, trade-in & tax
Work out your real car payment. Enter the price plus your down payment, trade-in, sales tax, rate and term to see the monthly payment and what the loan truly costs.
What actually gets financed
An auto loan calculator and a car payment calculator answer the same question from the same four inputs.
You finance the price plus sales tax, minus your down payment and trade-in. On a $35,000 car with $5,000 down, 7% tax and a 7% APR over 60 months, that is $32,450 financed and a payment of $642.55.
The trade-in tax credit most people miss
In most US states, sales tax is charged on the price after your trade-in is deducted, not on the full sticker. That makes a trade-in worth more than its face value, because it also cuts the tax bill.
| Trade-in | Tax with credit | Tax without | You save |
|---|---|---|---|
| $0 | $2,450 | $2,450 | — |
| $5,000 | $2,100 | $2,450 | $350 |
| $10,000 | $1,750 | $2,450 | $700 |
| $15,000 | $1,400 | $2,450 | $1,050 |
A $10,000 trade-in saves $700 in tax on top of reducing the balance. This is also why a dealer's trade-in offer is not directly comparable to a private-sale price: selling privately for $10,500 can leave you worse off than trading at $10,000, once the tax credit is counted.
A handful of states do not give the credit and tax the full price — California, Virginia, Hawaii, Kentucky, Maryland, Montana and the District of Columbia among them. Set the toggle above to match your state.
Watch the term, not the payment
| Term | Monthly payment | Total interest | Total out of pocket |
|---|---|---|---|
| 36 months | $1,001.96 | $3,621 | $41,071 |
| 48 months | $777.06 | $4,849 | $42,299 |
| 60 months | $642.55 | $6,103 | $43,553 |
| 72 months | $553.24 | $7,383 | $44,833 |
| 84 months | $489.76 | $8,690 | $46,140 |
Stretching from 36 to 84 months drops the payment by $512 and costs $5,069 more in interest. Dealers present this as making a car affordable, and in a narrow sense it does — but the deeper problem is depreciation outrunning amortisation. A new car loses 20 to 30% of its value in year one while an 84-month loan has barely touched the principal, so you spend years owing more than the car is worth. Selling or writing it off in that window means writing a cheque.
Negotiate the price, never the payment
The single most useful habit in a dealership: refuse to discuss monthly payments until the price is agreed. A payment can be made to hit any target by lengthening the term or reducing the trade allowance, and those levers are invisible in a monthly figure.
- Get pre-approved by your own bank or credit union first. It gives you a rate to beat and makes you a cash buyer.
- Negotiate the out-the-door price, which includes tax, title, registration and every fee.
- Keep the three deals separate: the price of the new car, the value of your trade, and the financing. Bundled together they can hide a bad number inside a good one.
- Watch the doc fee. Capped by law in some states, unlimited in others, and occasionally several hundred dollars.
- Decline add-ons at the finance desk unless you priced them beforehand. Paint protection, VIN etching and extended warranties carry very large margins.
Down payment and the wider budget
A common target is 20% down on new, 10% on used. The purpose is not virtue but equity: enough of a deposit that depreciation does not immediately put you underwater.
And the payment is not the cost of the car. Insurance, fuel, maintenance and registration commonly add $260 to $500 a month on top. Work out what you can afford with the car affordability calculator, which starts from a budget instead of a price, and price the fuel side with the fuel cost calculator.
Estimate only — not financial advice. Tax rules, fees and rates vary by state and lender.
How this car loan calculator works out its numbers
The amount financed is price + sales tax − down payment − trade-in, amortised over the term at the given APR using the standard payment formula.
- Sales tax defaults to the trade-in credit, charging tax on price minus trade, which is how most US states work. Switch the toggle for California, Virginia, Hawaii, Kentucky, Maryland, Montana and DC, which tax the full price.
- Not included: title, registration, documentation fees, dealer add-ons and any negative equity rolled in from a previous loan. Those all raise the real financed amount.
- Fixed-rate, simple-interest assumption with payments made on schedule. Precomputed-interest contracts and variable rates behave differently.
- Tax rates vary widely and some jurisdictions add local tax on top of the state rate, or cap the taxable amount. Check your own rate.
- Not modelled: gap insurance, extended warranties financed into the loan, manufacturer rebates and depreciation.
Reviewed September 2026.
Figures reviewed . Every worked example on this page is checked against the calculator above.
Car Loan Calculator: frequently asked questions
How is a car payment calculated?
The amount financed — price plus sales tax, minus down payment and trade-in — is amortised over the term at your APR. A $35,000 car with $5,000 down at 7% tax and 7% APR over 60 months is $642.55 a month.
Does a trade-in reduce sales tax?
In most US states, yes. Tax is charged on the price after the trade-in is deducted, so a $10,000 trade on a $35,000 car at 7% tax saves $700 in tax on top of reducing the balance.
Which states don't give a trade-in tax credit?
California, Virginia, Hawaii, Kentucky, Maryland, Montana and the District of Columbia tax the full purchase price. Set the toggle above to match your state, since it changes the tax by hundreds of dollars.
Is it better to trade in or sell privately?
Not always private. The trade-in tax credit means a $10,000 trade can beat a $10,500 private sale in a 7% tax state, because the trade also cuts $700 from the tax bill. Compare after tax, not before.
Is a longer car loan bad?
It lowers the payment and raises the cost. Going from 36 to 84 months on a $35,000 car saves $512 a month and costs $5,069 more in interest, while leaving you owing more than the car is worth for years.
How much should I put down on a car?
Around 20% on a new car and 10% on used. The point is equity: enough deposit that first-year depreciation does not immediately leave you underwater on the loan.
What does out-the-door price mean?
The total including sales tax, title, registration and every dealer fee — the number that actually leaves your account. Negotiate this rather than the sticker price or the monthly payment.
Should I get pre-approved before visiting a dealer?
Yes. A pre-approval from your bank or credit union gives you a rate to beat, makes you effectively a cash buyer, and stops the conversation being steered toward monthly payments instead of price.