Auto Loan Calculator

Calculate your car loan monthly payment including trade-in value, down payment, and sales tax. Compare loan terms from 24 to 84 months.

Vehicle & Loan Details

$
$
$
%
%

Enter your vehicle and loan details

See monthly payment, total cost, and a full breakdown

Related Calculators

Pro Tip

Get pre-approved for financing before visiting the dealership. This gives you negotiating leverage and a rate to beat.

Compare with Loan Comparison Tool →

Popular Tools

How Auto Loans Work

An auto loan is a secured loan where the vehicle itself serves as collateral. Because the lender can repossess the car if you default, auto loan rates are typically lower than unsecured personal loans. However, rates vary widely based on your credit score, the loan term, and whether the vehicle is new or used.

When calculating the total cost of a vehicle, it is important to account for more than just the sticker price. Sales tax, which varies by state from 0% to over 10%, is often rolled into the loan. Your down payment and any trade-in value reduce the amount you need to finance, directly lowering your monthly payment and total interest.

Longer loan terms (72-84 months) have become increasingly common, offering lower monthly payments. However, they come with significant risks: you pay substantially more interest, and you may end up "upside down" on the loan, meaning you owe more than the car is worth. This is called negative equity.

Financial experts generally recommend keeping auto loan terms at 60 months or less for new cars and 36 months or less for used cars. A good target is to keep your total monthly vehicle expenses (loan payment plus insurance plus fuel) under 15-20% of your take-home pay.

Before heading to the dealership, get pre-approved for a loan from your bank or credit union. Dealer financing may be convenient, but having a pre-approved rate gives you negotiating leverage and a benchmark to compare against.

Auto Loan Formula

Monthly Payment Formula

PMT = (P − D − T + Tax) × [r(1+r)n] / [(1+r)n − 1]

Where:

PMT = Monthly payment

P = Vehicle price

D = Down payment

T = Trade-in value

Tax = Sales tax amount

r = Monthly interest rate (APR / 12)

n = Loan term in months

Example

For a $35,000 car with $5,000 down, no trade-in, 6.25% tax, 6.5% APR for 60 months:

  • • Sales tax = $35,000 x 6.25% = $2,187.50
  • • Amount financed = $35,000 + $2,187.50 - $5,000 = $32,187.50
  • • Monthly rate (r) = 6.5% / 12 = 0.005417
  • • PMT = $32,187.50 x [0.005417 x 1.005417^60] / [1.005417^60 - 1]
  • • PMT = $629.40 per month
  • • Total interest = ($629.40 x 60) - $32,187.50 = $5,576.50

Frequently Asked Questions

What credit score do I need for a good auto loan rate?
Generally, a credit score of 720 or above will qualify you for the best rates (often 3-5% APR). Scores between 660-719 typically get moderate rates (5-8%), while scores below 660 may face higher rates (8-15% or more). Always shop around, as rates vary significantly between lenders.
Should I make a larger down payment?
A larger down payment reduces your loan amount, lowers monthly payments, decreases total interest paid, and helps you avoid being upside down on the loan. Aim for at least 20% down on a new car and 10% on a used car.
Is it better to get a shorter or longer loan term?
Shorter terms (36-48 months) mean higher monthly payments but significantly less total interest. A 60-month loan at 6.5% on $30,000 costs about $5,200 in interest, while a 72-month loan costs about $6,300. Keep terms to 60 months or less when possible.
How does trade-in value affect my loan?
Your trade-in value is subtracted from the purchase price before calculating the loan amount. In many states, you also only pay sales tax on the difference (price minus trade-in), giving you a double benefit.
Should I finance through the dealer or my own bank?
Get pre-approved from your bank or credit union first, then compare with dealer financing. Dealers sometimes offer promotional rates (0% or low APR) on new cars, which can be excellent deals. But for used cars, your own lender usually offers better rates.