Auto Loan Calculator

What this calculator answers

The monthly payment on a car loan once the whole deal is counted: the price, any rebate, your down payment, a trade-in and the loan still owed on it, sales tax under your state’s rule, and fees you add to the loan or pay at signing. It also shows the amount financed, the cash due at signing, the interest and the total cost of the car. Turned around, it finds the most car a monthly budget buys with the same deal.

How to use the auto loan calculator

• Find: Monthly payment from a vehicle price, or Price I can afford from a monthly budget.
• Vehicle price: the selling price you agreed on, before tax and fees, as written on the dealer’s worksheet or buyer’s order. Money fields accept 34800, $34,800 or 34.8k.
• Rebate: cash back from the manufacturer applied to the deal. Leave it empty if there is none.
• Down payment: cash toward the car itself. Tax and fees you pay at signing have their own fields, so don’t include them here too.
• Trade-in value and Owed on trade-in: the dealer’s offer for your car and the payoff amount from your current lender. The payoff can differ from the balance on your statement, so ask the lender for it.
• Sales tax is charged on, Sales tax rate and How you pay the sales tax: your state’s rule (see below), your combined state and local rate, and whether the tax is added to the loan or paid at signing.
• Fees added to the loan and Fees paid at signing: title, registration, documentation and other charges, split the way your deal handles them.
• APR (or interest rate): the rate on your loan offer. Loan term: how many monthly payments you make, for example 72 for a six-year loan.
• Extra monthly payment and First payment date (both optional): principal you add to each payment, and the date that gives the schedule its dates and a payoff date.

Results update as you type. The Try buttons load the cases worked through below: negative equity, 0% APR, a rebate and a monthly budget. To weigh two offers, press Save for comparison, change the inputs and save again: each saved offer shows how much its payment, interest and total cost differ from the first. To see whether the payment fits your income, Continue in the Debt-to-Income Ratio Calculator adds it to your debts as a car loan.

How your car payment is calculated

First work out the amount financed, then the level payment that repays it with interest.

$$A = P - R - D - (T - O) + S_{\text{loan}} + F_{\text{loan}}$$ $$M = \frac{A \times i}{1 - (1 + i)^{-n}}, \qquad i = \frac{\text{APR}}{12}$$

• $A$ is the amount financed, and $P$ the vehicle price.
• $R$ is the rebate and $D$ the down payment.
• $T - O$ is your trade-in equity: its value minus the payoff still owed. When it is negative, the difference adds to the loan.
• $S_{\text{loan}}$ and $F_{\text{loan}}$ are the sales tax and fees added to the loan (0 if you pay them at signing).
• $M$ is the monthly payment, $n$ the number of payments and $i$ the monthly rate as a decimal. At 0% APR the payment is simply $A \div n$.

Each month, interest is charged on the balance still owed and the rest of the payment reduces it. The payment is rounded to the cent, so the last one is adjusted by a few cents to bring the balance to exactly $0. In a spreadsheet, =PMT(APR/12, n, -A) gives the same payment before rounding.

Worked example: a $34,800 car with a trade-in, 6.9% APR for 60 months

You put $3,000 down and trade in a car worth $9,500 with $6,200 still owed on it. Sales tax is 6.5% of the price minus the trade-in, added to the loan, along with $600 of fees; another $250 of fees is paid at signing.

1. Trade-in equity: $9,500 − $6,200 = $3,300.
2. Sales tax: ($34,800 − $9,500) × 0.065 = $25,300 × 0.065 = $1,644.50.
3. Amount financed: $34,800 − $3,000 − $3,300 + $1,644.50 + $600 = $30,744.50.
4. Monthly rate: i = 0.069 ÷ 12 = 0.00575.
5. Payment: M = $30,744.50 × 0.00575 ÷ (1 − 1.00575⁻⁶⁰) = 607.3285, so $607.33 a month.
6. The first payment is $176.78 of interest and $430.55 of principal. Half the loan is repaid by payment 33, and the 60th payment is $607.19, so the payments total $36,439.66, of which $5,695.16 is interest.
7. Cash at signing is $3,000 + $250 = $3,250. The car costs $34,800 + $1,644.50 tax + $850 fees + $5,695.16 interest = $42,989.66 in all.

Is sales tax charged before or after your trade-in?

It depends on your state. Some subtract the trade-in from the taxable price: the Texas Comptroller describes its motor vehicle tax as a percentage of the sales price minus any trade-in allowance. Others tax the full price: California’s tax agency says a trade-in allowance can’t be excluded from the amount taxed. Choose the rule in Sales tax is charged on, and the steps show the amount taxed.

The difference is the trade-in value times the tax rate. In the example, tax on the full price would be $34,800 × 0.065 = $2,262.00, which is $617.50 more, and the payment would be $619.53 instead of $607.33.

Rebates vary as well. A $2,500 rebate on the example lowers the tax to $1,482.00 where it reduces the taxed price, but leaves it at $1,644.50 where the state taxes the price before the rebate, as California’s guidance does for a manufacturer rebate assigned to the dealer. Check Tax the price before the rebate in that case. Rules have exceptions and change, so check with your state’s revenue or motor vehicle department.

What happens to negative equity when you trade in?

It still has to be paid: a dealer may add it to the new loan or take it out of your down payment. Negative equity is what you owe on your car beyond what it’s worth, and added to the loan, that old debt is repaid with interest, on top of the new car. Suppose the example trade-in, worth $9,500, still owes $12,900:

• $3,400 of negative equity goes into the loan, which grows to $37,444.50.
• The payment rises to $739.68: that’s $67.16 more each month and $629.88 more interest over 60 months.
• The loan starts at 107.6% of the price, so you owe more than the car cost from the first day.

The calculator shows these figures in a notice of their own whenever the payoff is larger than the trade-in value. Paying down the old loan first, or choosing a shorter term, keeps the extra interest down.

Financing taxes and fees vs. paying them upfront

Paying tax and fees at signing takes them out of the loan, so you pay no interest on them, but you need more cash on the day. In the example, paying the $1,644.50 of tax at signing gives:

Paying the tax up front saves $304.56 of interest. Taxes, title and registration fees set by the government aren’t negotiable, but dealer charges such as documentation or preparation fees may be.

How the loan term changes your total interest

A longer term spreads the same amount financed over more payments, so each payment is smaller but more interest builds up. For the example loan at 6.9%:

Going from 60 to 84 months lowers the payment by $144.81 but adds $2,411.52 of interest. A longer loan also keeps you owing more than the car is worth for longer, which matters if you trade it in early. The calculator builds this table from your own inputs, next to a second one for APRs 1 and 2 points either side of yours.

0% APR or a $2,500 rebate?

Take the one with the lower total cost, not the lower payment. With the example deal, 0% APR costs less unless you can borrow at about 3.6% or less elsewhere. Manufacturer incentives include both low finance rates and cash back:

• 0% APR for 60 months: $512.41 a month, no interest, $37,294.50 in total.
• $2,500 rebate with a 6.9% loan: $554.73 a month, $39,834.07 in total, which is $2,539.57 more.

The break-even rate is close to 3.6%: with a 3.5% loan the rebate’s total cost is $37,201.64, $92.86 below the 0% offer, but at 3.7% it is $37,352.80, $58.30 above. To check your own offers, press 0% APR and Save for comparison, then press $2,500 rebate, enter the rate you have been quoted and save again.

How much car can I afford?

About as much as the loan your monthly budget repays, plus your down payment, any rebate and your trade-in equity, minus the sales tax and fees that go into the loan. Choose Price I can afford and enter the budget. The calculator finds the most you can borrow at your rate and term, $A = B \times (1 - (1 + i)^{-n}) \div i$ for a budget $B$, rounded down to the cent. It then finds the highest price whose tax and fees still fit within that loan, after your down payment and trade-in.

With the example deal, $550 a month at 6.9% for 60 months finances up to $27,842.38 and buys a $32,075.00 car. Stretching to 72 months buys a $36,308.43 car, but the interest rises from $5,157.60 to $7,248.98. If the negative equity, tax and fees alone need more than the budget, the calculator says so and gives the smallest budget that works. Insurance, fuel and maintenance come on top of the loan payment.

Reading the result

• Monthly payment (or Price you can afford) is the headline, with the amount financed, the APR and the term, and the payoff date when you give a first payment date.
• Amount financed is what you borrow, the figure a Truth in Lending disclosure lists under that name. Total of payments is every loan payment added up, and Total interest is the difference.
• Cash due at signing is the down payment plus any tax and fees you pay then.
• Total cost of the car is the price after any rebate, plus sales tax, all fees and interest. It equals the cash at signing plus the loan payments plus your trade-in equity; the line under the bar chart shows that split.
• From price to amount financed lists each step from the price to the loan, with negative equity as its own line.
• Compare loan terms and APRs reruns your deal at 36 to 84 months and at nearby APRs. Each table has a Download CSV button.
• The schedule shows every payment or each year, with a CSV download, and the chart plots the balance falling to $0.

Assumptions and limitations

• Interest is charged once a month at the APR ÷ 12. Many auto loans charge simple interest daily, so a lender’s schedule can differ by a few cents depending on the days between payments.
• The APR is treated as the loan’s interest rate. If your APR includes lender fees, the payment shown is slightly high.
• One combined sales tax rate, applied to the price after the trade-in credit and rebate your state allows. Fees are not taxed here; if your state taxes a fee, add that tax to the fee.
• Add-ons such as GAP coverage or a service contract are included only if you add them to the fees. Insurance, fuel, maintenance and registration renewals are not included.
• This is an educational estimate, not a loan offer or tax advice.

Common mistakes

• Entering the term in years. The term is in months: a five-year loan is 60, not 5. The calculator points this out when you type a small number.
• Using the statement balance of your old loan. The payoff amount from your lender is the number that settles the trade-in.
• Counting tax and fees twice. An out-the-door price already includes them, and a down payment shouldn’t include tax or fees you enter separately.
• Assuming the trade-in lowers the tax everywhere. In states that tax the full price, it doesn’t.
• Comparing payments at different terms. A lower payment over 84 months can cost more than a higher one over 60; compare the total cost.
• Comparing an APR with an interest rate. Quotes are only comparable APR to APR.