Car Loan Calculator
Calculate monthly payments and total cost for your auto loan.
Calculate monthly payments and total cost for your auto loan.
Monthly Payment
$634.92
Loan Amount
$32,450
Total Interest
$5,645
Sales Tax
$2,450
Total Cost
$43,095
The car loan calculator calculates your monthly payment and total cost for an auto loan. You enter the vehicle price, down payment, trade-in value, and sales tax rate, and the calculator determines your loan amount and uses the standard amortization formula to compute monthly payments. It also shows you the total interest you'll pay over the life of the loan and the true total cost of the vehicle including taxes and financing charges.
Formula
Monthly Payment = P × r × (1+r)^n / [(1+r)^n - 1]
Where P = loan amount (vehicle price + sales tax - down payment - trade-in), r = monthly interest rate (annual rate ÷ 12), and n = total number of monthly payments. The loan amount is calculated after subtracting your down payment and trade-in value from the vehicle price plus applicable sales tax.
The percentage of the car's value that you're financing. A lower LTV (larger down payment) typically qualifies you for better interest rates and protects you from being "underwater" on the loan.
Cars lose value rapidly — typically 20% in the first year and 60% over five years. This means a 5-year loan on a new car may leave you owing more than the car is worth for the first few years.
Beyond the loan payment, factor in insurance, fuel, maintenance, registration, and depreciation. The true cost of owning a car is typically 1.5-2× the purchase price over its lifetime.
If your car is totaled and you owe more than it's worth, gap insurance covers the difference. This is especially important with low down payments or long loan terms.
Tom wants to buy a $35,000 car with $5,000 down, a $3,000 trade-in, 7% sales tax, at 5.9% APR for 60 months.
Result: Monthly payment: $568. Over 60 months, Tom pays $34,080 total on the loan — $4,630 in interest. The true total cost of the vehicle including tax and interest is $42,080.
Fact-Checked — All content is reviewed for accuracy against authoritative sources including IRS.gov, Federal Reserve data, and established financial research.