How your car payment is calculated
Enter the vehicle price, your down payment, the trade-in value of your current car, your state's sales tax and the loan's APR and term. For example, a $35,000 car with $5,000 down and 7% sales tax means financing $32,450; at 7% APR for 60 months, the payment is about $642.55 a month, with $6,103 in total interest.
Sales tax and trade-ins
In most states, sales tax is charged on the price minus the value of your trade-in, which is how this calculator applies it. Your trade-in and down payment both reduce the amount you borrow and therefore the interest you pay.
Choosing a loan term
Longer terms lower the monthly payment but raise the total cost. Financing $30,000 at 7% costs about $511 a month over 72 months but $6,826 in interest; shorter terms save money and reduce the risk of owing more than the car is worth.
- A common guideline: put at least 20% down and keep the loan to 60 months or less.
- Get pre-approved by a bank or credit union to compare with dealer financing.
- Ask about fees, add-ons and warranties, which can be rolled into the loan.
Buying a home? Try Mortgage Calculator. Paying down cards? See Credit Card Payoff Calculator.
Frequently Asked Questions
What is a good APR for a car loan?
It depends on your credit score, the loan term and whether the car is new or used. Compare offers from banks, credit unions and the dealer before you sign.
Is sales tax included in my car loan?
It can be. If you finance it, add your state's rate in “Sales tax” and the calculator includes it in the loan amount.
How long should a car loan be?
Many experts suggest 60 months or less. Longer loans lower the payment but cost more and increase the chance of owing more than the car is worth.