Auto Loan Calculator: Monthly Car Payment
Before you step into a dealership, know your numbers. This free auto loan calculator shows your monthly car payment, the total interest you'll pay, and what the car really costs by the end of the loan — including sales tax, down payment and trade-in.
Auto Loan Calculator
How to Use This Calculator
Enter the car's out-the-door price, your down payment, and any trade-in value. Add your state's sales tax rate — the calculator taxes the price and rolls the tax into the loan, just like a dealer does.
Enter the interest rate you've been offered and choose a loan term. Click Calculate to see your monthly payment, total interest and the full cost of the car including tax.
The Formula
Car loans use the same amortization formula as mortgages: M = P × [r(1 + r)ⁿ] ÷ [(1 + r)ⁿ − 1], where P is the amount financed, r is the monthly rate (annual rate ÷ 12) and n is the number of months.
Worked example: a $32,000 car with $5,000 down and 7% sales tax. The financed amount is ($32,000 × 1.07) − $5,000 = $29,240. At 6.9% for 48 months, r = 0.00575 and n = 48, giving a monthly payment of $698.83. Total paid = $698.83 × 48 = $33,544, so interest costs $4,304 — and the $32,000 car really costs $38,544 including tax, interest and your down payment.
Tips
Get pre-approved by a bank or credit union before visiting the dealer. You'll know your rate in advance, and dealers often beat it to win your financing business.
Negotiate the car price first, never the monthly payment. Dealers love stretching a loan to 72 or 84 months to make the payment "fit" — it's how a $25,000 car ends up costing $33,000.
Every extra $1,000 of down payment cuts about $20 off your monthly payment on a typical 5-year loan, and saves roughly $190 in interest over the life of the loan.
Frequently Asked Questions
What is a good interest rate on a car loan?
Rates depend mainly on your credit score and the lender. People with excellent credit (720+) often qualify for the lowest advertised rates, while subprime borrowers can pay several times more. Get pre-approved by a bank or credit union before visiting a dealer — a pre-approval in hand gives you a rate to compare against the dealer's financing offer.
How does a trade-in affect my car loan?
Your trade-in's value is subtracted from the price of the new car, just like a down payment, which lowers the amount you finance. If you still owe money on the trade-in, the remaining balance is added to the new loan (called negative equity). Dealers often offer less than a private sale would, so compare both options.
What loan term should I choose for a car?
Longer terms (72 to 84 months) make the monthly payment smaller but cost far more in interest and keep you owing more than the car is worth (upside down) for years. A good rule of thumb is 36 to 48 months if you can afford it, and no longer than 60 months. The 20/4/10 guideline suggests a 20% down payment, a 4-year loan, and payments under 10% of your income.
Why is my car loan payment higher than the calculator says?
Dealers add extras that this calculator does not include by default: sales tax, title and registration fees, documentation fees, extended warranties and gap insurance. Those get rolled into the financed amount and raise the payment. Always ask for the out-the-door price and check every line item before signing.
Should I pay off my car loan early?
If the loan has no prepayment penalty, paying extra principal each month shortens the loan and cuts total interest — every extra dollar goes straight to the balance. But if your loan rate is low (say under 4%), you may earn more by investing the money instead. Compare your loan rate with what your savings earn, and check your loan agreement for any early-payment fees.