Auto Loan Calculator
Estimate a car loan's monthly payment, total interest, and total cost from the price, your down payment and trade-in, the sales tax, the rate, and the term.
An auto loan payment depends on how much you finance and the rate and term. The amount financed is the vehicle price plus sales tax, minus your down payment and any trade-in. This calculator amortizes that loan to show the monthly payment, the total interest over the term, and the total you pay, so you can see how the down payment, rate, and term change the cost of the car.
Assumptions
- The amount financed is the vehicle price plus sales tax, minus your down payment and trade-in, floored at zero. Sales tax is applied to the full price; some states tax the price after a trade-in instead, which would lower the financed amount, so adjust the price if your state works that way.
- The payment is a standard fully amortizing loan at a fixed rate: equal monthly payments of principal and interest, with the loan paid to zero at the end of the term. Each month's interest is the balance times the monthly rate (the APR divided by 12), and the rest of the payment reduces the balance. The final payment absorbs rounding so the balance lands on exactly zero.
- The monthly payment is principal and interest only. It does not include insurance, fuel, maintenance, registration, or any add-ons like an extended warranty or gap insurance financed into the loan. For the full cost of owning the car, use the car affordability calculator.
- The rate you enter is the APR and is assumed fixed for the whole term. Total interest assumes you keep the loan to term and make every payment on schedule; paying extra or paying off early would reduce it.
- Every result is rounded to the nearest cent. This is an estimate for educational purposes only, not financial advice, and not a loan offer. Your actual rate and terms depend on credit and the lender.
How it works
A car loan is a standard amortizing loan, the same math as a mortgage. Two steps: find the amount financed, then amortize it.
The amount financed is the price plus sales tax, minus your down payment and any trade-in:
financed = price + sales tax − down payment − trade-in
The monthly payment comes from the standard amortization formula,
M = P times r(1+r)^n / ((1+r)^n − 1), where P is the amount financed, r is the monthly rate (the APR
divided by 12), and n is the number of months. Each month, interest is the balance times r and the rest
of the payment reduces the balance, until it reaches zero at the end of the term. Total interest is the
sum of every month’s interest; the total of payments is the financed amount plus that interest.
Worked example
A $35,000 car, $3,500 down, no trade-in, no sales tax, at 7 percent APR over 60 months:
- Amount financed: $35,000 minus $3,500 = $31,500.
- Monthly payment: about $623.74.
- Total interest over 60 months: about $5,924.
- Total of payments: $31,500 + $5,924 = about $37,424.
- Total cost including the down payment: about $40,924.
Stretch the same loan to 72 months and the payment drops, but the total interest rises, because you borrow for longer. A larger down payment does the opposite, lowering both the payment and the interest.
Scope and limitations
The payment is principal and interest only; it excludes insurance, fuel, maintenance, registration, and add-ons like gap insurance or an extended warranty. For the full cost of owning the car, and how much you can afford, use the car affordability calculator. Sales tax is applied to the full price; some states tax the price after a trade-in, which would lower the financed amount. This is an estimate for education, not financial advice and not a loan offer.
Sources
- Consumer Financial Protection Bureau: understanding auto loans and the total you will pay
- CFPB: how to shop for an auto loan and compare the APR
- Standard fixed-rate loan amortization (the same formula used for mortgages).
Frequently asked questions
- How is a car loan payment calculated?
- It is a standard amortizing loan. The lender takes the amount financed, applies the monthly rate (the APR divided by 12), and spreads repayment over the term into equal monthly payments. Early payments are mostly interest and later ones mostly principal. This calculator uses the same formula a lender does, so the payment matches a fixed-rate quote.
- Does a longer loan term save me money?
- It lowers the monthly payment but raises the total interest, so it costs more overall. Stretching a loan to 72 or 84 months makes the payment look affordable while you pay interest for years longer, and it raises the risk of owing more than the car is worth. A shorter term costs more per month but less in total.
- How much should I put down on a car?
- A larger down payment lowers the amount financed, the monthly payment, and the total interest, and it reduces the chance of going underwater as the car depreciates. A common guideline is around 20 percent on a new car and 10 percent on a used one, but more is better if you can afford it without draining your emergency fund.
- Is the monthly payment the full cost of owning a car?
- No. The payment is only principal and interest. Owning a car also costs insurance, fuel, maintenance, repairs, and registration, which together can rival the loan payment. To budget for the whole picture and see how much car you can afford, use the car affordability calculator.
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Learn how this works
New to this topic? Our companion guide explains it in plain language: Should You Buy or Lease a Car?
Last reviewed June 2026.