π Auto Loan Calculator
Monthly payment, total interest, and what each loan term really costs you.
Monthly Payment
Term Comparison
Amortization Summary (yearly)
Estimates for planning only, not financial advice.
How to Use This Calculator
Enter the vehicle price, your down payment, any trade-in value, your local sales tax rate, the loan term, and the APR you were quoted. The calculator computes the amount financed, your monthly payment, the total interest, and the all-in cost of the car, then shows a side-by-side comparison of every common term length and a yearly amortization summary you can download.
Enter the Vehicle Price (the out-the-door price before tax) and your Down Payment. Aim for at least 20 percent of the price to stay ahead of depreciation.
Add your Trade-In Value if you have one. Most states tax you only on the price minus the trade-in, which this calculator handles automatically.
Set the Sales Tax Rate for your area and the APR from your pre-approval or the dealer quote. Then pick a Loan Term and study the comparison table before committing.
Review the amortization summary to see how much of each year goes to interest versus principal, and download the CSV if you want to model extra payments in a spreadsheet.
How Auto Loans Work
An auto loan is a simple-interest installment loan secured by the vehicle. You borrow a lump sum, pay it back in equal monthly installments, and the lender can repossess the car if you stop paying. Interest accrues on the remaining balance, so each payment is split between the interest charge and the principal that reduces your balance.
The amount financed is the number that matters most, because everything else flows from it. A $35,000 car with $7,000 down, no trade-in, and 7 percent tax means $30,450 financed. At 7 percent APR over 60 months, that is about $603 per month, with roughly $5,730 of total interest. The same car with $0 down finances $37,450 and costs about $7,050 in interest: the missing down payment costs you twice, once in principal and once in interest.
Down Payment Guidance: The 20 Percent Rule
New cars typically lose 20 to 30 percent of their value in the first year. Putting 20 percent down keeps your loan balance under the car's market value, which protects you if the car is totaled or you need to sell early. It also reduces the interest bill and often unlocks a lower APR, because lenders price smaller, safer loans more cheaply. If 20 percent is out of reach, put down as much as you can and add gap insurance, which pays the difference between the loan balance and the insurance payout after a total loss.
Loan Term Trade-Offs: Why Shorter Terms Save Real Money
Stretching a loan from 60 to 84 months cuts the monthly payment noticeably, which is exactly why dealers love long terms. But you pay for that comfort three times: more interest dollars, a longer stretch of negative equity where you owe more than the car is worth, and a higher chance of still making payments on a car that needs expensive repairs. Shorter terms flip all three in your favor. The term comparison table above your results makes the trade-off concrete: look at the total interest column, not just the monthly payment, because the monthly number is designed to make long loans feel cheap.
Worked Example
$35,000 vehicle, $7,000 down payment (20 percent), no trade-in, 7 percent sales tax, 7 percent APR, 60-month term. Taxable price = $35,000, tax = $2,450, amount financed = $35,000 + $2,450 - $7,000 = $30,450. Monthly rate = 0.07/12 = 0.005833. Payment = 30450 x 0.005833 x (1.005833)^60 / ((1.005833)^60 - 1) = about $603 per month. Total of payments = $36,180, total interest = $5,730. Switch the term to 84 months and the payment drops to about $458, but total interest climbs to roughly $8,022: you pay $2,292 extra to save $145 a month, and you stay underwater for most of the loan.
Estimates for planning only, not financial advice.
Frequently Asked Questions
How is a car loan monthly payment calculated?
Auto loans use the standard amortization formula: M = P x r x (1+r)^n / ((1+r)^n - 1), where P is the amount financed, r is the monthly interest rate (APR divided by 12), and n is the number of payments. The amount financed is the vehicle price minus your down payment and trade-in, plus sales tax and any fees you roll into the loan. Every payment is split between interest and principal, and early payments are mostly interest.
Why do experts recommend 20 percent down on a car?
A 20 percent down payment does three things: it keeps your loan balance below the car's value so you avoid being underwater (owing more than the car is worth), it shrinks the amount you pay interest on, and it usually earns you a better rate from the lender. Cars lose value fast, often 20 percent in the first year, so a small down payment means negative equity from day one. If you cannot reach 20 percent, add gap insurance to cover the difference if the car is totaled.
Is a longer loan term always a bad idea?
Longer terms lower the monthly payment but raise the total interest and stretch out the period where you owe more than the car is worth. On a $28,000 loan at 7 percent APR, 72 months costs about $4,600 more in interest than 48 months, and you stay underwater roughly twice as long. The comparison table below your results shows all five common terms side by side, so you can see exactly what the lower payment costs you.
How does a trade-in affect my loan?
Your trade-in reduces the taxable price in most states, which lowers both the sales tax and the amount you need to finance. If you buy a $35,000 car and trade in one worth $10,000, you are typically taxed on $25,000 instead of $35,000, saving hundreds of dollars on top of the $10,000 equity. Owing more on your trade-in than it is worth (negative equity) works in reverse: the difference gets added to the new loan.
Should I finance the sales tax or pay it up front?
Paying tax up front keeps the loan smaller and reduces total interest, but most buyers roll it into the loan for simplicity and lower cash out of pocket. This calculator adds the tax to the amount financed by default, which matches how most dealer financing works. If you plan to pay tax separately, set the tax rate to 0 and compare the difference.
What APR should I expect on an auto loan?
New-car rates for excellent credit usually run a few points below used-car rates, and the spread between top-tier and subprime credit can be 10 percentage points or more. Getting pre-approved by your bank or a credit union before visiting the dealer gives you a rate to beat and removes the dealer's markup on financing. Enter any rate you are quoted to see its true cost before you sign.