Car loan calculator
Enter the price of the car, what you pay up front and the loan terms to see the monthly payment. The calculator adds the sales tax and the fees to the amount you borrow.
This answer is for the example values in the boxes above. $28,000 car, $3,000 down, $5,000 trade-in, 6% sales tax, $500 fees, 60 months at 7%. Change the boxes to see your own answer.
Registration, title and other fees that you do not enter are not in the loan. Your lender's quote decides the rate and the term.
How it works
The amount you borrow is the price, plus the sales tax and any fees you finance, minus your down payment and your trade-in. The sales tax is the rate you enter times the price. If your state takes the trade-in off the price before it charges tax, check the box and the tax is figured on the price minus the trade-in.
The payment then comes from the loan formula. Interest is charged each month at one twelfth of the yearly rate, and one payment brings the balance to zero after the last month. The calculator shows the payment, the amount financed, the tax, the interest and the total of the payments.
A worked example
A car costs $28,000. You pay $3,000 down, trade in a car worth $5,000, pay 6 percent sales tax and finance $500 of fees. The tax is $1,680, so you borrow $22,180. At 7 percent for 60 months the payment is $439.19, the interest is $4,171.44 and you pay $26,351.44 in all.
If your state takes the trade-in off first, the tax is $1,380, you borrow $21,880 and the payment is $433.25.
The same loan over different terms
A longer loan lowers the payment and raises the interest. On the $22,180 loan at 7 percent, 36 months costs $684.85 a month and $2,474.74 in interest. For 48 months it is $531.13 and $3,314.13. For 72 months it is $378.15 and $5,046.58.
At 84 months the payment is $334.76, which is less than half of the 36-month payment, and the interest is $5,939.47.
What the payment leaves out
Registration, title fees and insurance are not in the loan unless you enter them. The sales tax rate depends on where you register the car, and the states differ in how they treat a trade-in. Your lender’s offer sets the rate and the term, so enter each offer you get and compare them.
Questions
How do I calculate a car payment?
Add the sales tax and the fees to the price, then take off the down payment and the trade-in. That is the amount you borrow. The payment comes from the loan formula, with the rate and the number of months.
Does a trade-in lower the sales tax?
It depends on the state. Some states charge sales tax on the price minus the trade-in, and others on the full price. Check the box only if yours takes the trade-in off first. The dealer or your state tax office can tell you.
How much more does a longer car loan cost?
On a $22,180 loan at 7%, 36 months costs $684.85 a month and $2,474.74 in interest, and 84 months costs $334.76 a month and $5,939.47. The longer loan has the lower payment and more than twice the interest.
Should I put the fees into the loan?
Fees you finance earn interest like the rest of the loan, so paying them up front costs less. Enter only the fees you roll into the loan and leave out the ones you pay at signing.
What interest rate should I enter?
The rate on your lender’s offer. It depends on the lender and on your credit, so enter each offer you get and compare the payments before you sign.
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